June Inflation Gives More Runway to Fed for Rate Cuts
Retail sector remains stable amid spending pullback. Retail real estate is well positioned to navigate any near-term headwinds arising from a normalizing job market and changes in consumers’ spending habits. The U.S. vacancy rate was the lowest among the four major property types at 4.5 percent in March, and was the only one to register a drop over the last year. New supply will also stay under 45 million square feet for the fourth year in a row, despite multi-decade high occupancy, motivating retailers to lease spaces when slots do open. Ollie’s Bargain Outlet and Dollar Tree, for example, acquired most of the 300-plus 99 Cents Only Stores properties after the company filed for bankruptcy. Limited vacancy at power centers further emphasizes this dynamic, with recent big-box closures from Bed Bath & Beyond and JCPenney not significantly impacting property metrics.
