The US retail market in the first quarter of this year had demand exceeding supply, with a modest 9.5 million square feet of new retail space delivered in the country’s national index markets. Most of the retail space under construction is already pre-leased, leaving only 25% available for lease. Despite a decrease in leasing activity due to limited location availability, the leasing rate over the last year was higher, showing strong demand according to Jones Lang LaSalle (JLL).
The trend of small spaces under 2,500 square feet dominated lease agreements, accounting for over two-thirds of deals. The average size of newly leased spaces also dropped by 11.1 percent to 3,027 square feet. Retailers are increasingly opting for high-quality mall spaces, with a preference for class-A malls. However, supply constraints are expected due to limited construction starts and moderate deliveries soon.
