The recent opening of Taubman Centers’ new mall in Salt Lake City might have marked a nice symbolic moment for the retail real estate industry, but it’s not about to usher in a new era of construction abandon.
In spite of a slight rebound in retail real estate fundamentals, U.S. developers still feel skittish about investing in new construction projects, forecasts from several different research sources show.
The CoStar Group, a Washington, D.C.-based firm, estimates that in 2012, a total of 21.4 million sq. ft. of new retail space will enter the market, a record low figure, according to Suzanne Mulvee, CoStar’s senior real estate economist. Mulvee notes that next year promises to be only slightly better in terms of deliveries of new space, largely due to the fact that retailers are not expanding the way they once had.
“This is a paradigm shift, a shift to growing revenue primarily through online sales versus growing revenue through physical locations,” she notes.
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