In this episode of ‘The Inside Look,’ Senior Commercial Real Estate Economist Xander Snyder discusses some of the glimmers of light emerging in the CRE industry, specifically retail property performance. Watch below and subscribe to the CRE Insider blog for additional First American Title NCS insights. Transcript:Post-pandemic, Most Retail Space Has Proven Resilient Most retail properties have emerged from the pandemic in a relatively strong position. At a national level, retail property prices have declined, but at a slower pace than most other asset classes. The greatest rate of annual rate price declines reached 8% in mid-2023, but since then have stabilized and prices are now only declining by about 1%. Additionally, vacancy rates are low for most types of retail properties - between 2-5% on average for all retail store types, except for malls, which have a higher vacancy rate closer to 9%. This resiliency in retail property prices and vacancy rates is fundamentally a consequence of supply and demand dynamics. Consumers are still spending money, but there isn’t a lot of available retail space for tenants to lease. Why so little retail space? There’s very little new supply of retail space being added to the market. New retail space under construction accounts for just about half of a percentage point of existing inventory, compared to about 1% for office, 2% for industrial, and 4% for multifamily. Additionally, there’s a substantial quantity of retail space being removed from the current stock, either as conversion projects into other types of properties or demolitions to clear the way for new ground-up development. Relative to new additions to supply, the rate of demolitions for retail is higher than any asset class except for office, which has unique problems that the retail space doesn’t face. The result? Retail is doing better than many anticipated it would throughout in the face of rising eCommerce activity. For more on these latest trends in retail, be sure to check this X-Factor blog post on the First American economics center. Upcoming events I’ll be giving a talk on what to expect in the CRE economy next year in Birmingham, Alabama at the end of November. If you’re interested in attending, please reach out to your local First American representative.