Kroll Bond Rating Agency Releases Retail PropertyBeat Report
NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) today released its third issue of PropertyBeat, focused on the retail market. This report will provide an overview of the key retail trends shaping the underlying the commercial real estate (CRE) markets in KBRAs defined Primary Markets (KPrime). In addition, our Market Spotlight sections will highlight San Francisco and the challenges both landlords and retailers are facing in that market.
The retail industry continues to face headwinds, even within our KPrime markets. An unseasonably harsh winter and slow growth have contributed to weak consumer spending, as evidenced by a minimal increase of 1.8% year-over-year for Advanced Retail Sales (excluding motor vehicles and parts), as of Q1 2014. In addition, e-retailers continue to encroach on traditional merchants, many of which continue to reduce their footprint of brick and mortar stores.
KPrime net absorption for all retail segments was 1.9 million sf in Q1 2014, down 9.1% from one-year ago and 32.7% from the previous quarter. KPrime vacancy was 7.5% while average rents were relatively flat year-over-year at $17.56 per sf NNN.