There are several favorable markets that will continue to provide opportunities as part of our nationwide acquisition strategy. Populations are growing, consumer spending power is high, and real estate is tending to offer consistent returns. Here are some of the top markets where we’re seeing solid demographic and economic growth trends that are creating lucrative opportunities for investors and retailers.
Houston’s population growth is exceeding the national average—forecasted to increase annually by 2 percent over the next five years. Houston is also experiencing its highest recorded occupancy in the last 10 years, at 339.1 million square feet.
Over 1.9 million square feet of retail space was under construction at the end of Q2. More notable, however, is that 78 percent of that space is pre-leased, indicating strong tenant demand and confidence in the market.
Dallas has several trends in its favor. For starters, the market has seen a significant uptick in consumer spending. Average annual spending per consumer increased from $56,827 in 2013 to $61,698 in 2014. Dallas is also one of the fastest growing job markets, with employment rising 3.7 percent from July 2014 to July 2015.
If new construction doubles as expected by mid-2016, vacancy will increase, drawing in new retailers that haven’t been able to find available real estate. Lastly, we’re seeing signs of strong tenant demand when we look at net absorption rates: Over 5.4 million square feet had been absorbed as of September, 2015.
That brings us out of Texas and east to Atlanta. The Atlanta market has seen 15 consecutive quarters of positive activity, with over 1.8 million square feet of positive net absorption as of September, 2015.
Occupancy has increased to 92 percent - the highest level in seven years—which showcases Atlanta’s resilient retail market. And again, we see high employment growth in Atlanta, increasing at a pace of 3.4 percent over the past 12 months.
Charlotte continues to be a battleground for grocers and other major retailers competing for desirable space. Publix
, Whole Foods
, and Walmart
have all announced and/or begun new expansion plans in the area this year.
Economic and retail metrics show why. Employment growth swelled 3.6 percent from July 2014 to July 2015. The market had seen 1.3 million square feet of net absorption as of September, 2015. And nearly 984,000 square feet of retail space is under construction to meet growing tenant demand.
Denver is another market where the fundamentals are sound. Average household income is $85,088, ahead of the national average of $74,692. Employment grew 3 percent year-over-year in July 2015.
In addition, the population in Denver is highly educated with 24.4 percent of residents with a Bachelor’s degree versus 14 percent nationwide.
These markets are well-positioned and showing strong economics that in many cases are outpacing national averages. We anticipate that these markets will continue to provide attractive opportunities for our business, investors and retailers.