Several big-box retailer relocations boosted activity in Q4 2018. However, the Sears closures and the 120,000+/- sq. ft. of seasonal store closures pushed the quarterly net absorption into negative territory.
The vacancy rate increased to 12.2%, up 46 bps quarter-to-quarter.
Activity was strong throughout 2018. Large retailer closures, such as Sears, Kmart and Toys"R"Us, forced the yearly net absorption to fall behind new supply. However, the 12.2% year-end vacancy rate was 44 bps lower than one year ago, primarily due to a substantial amount of unused space at Winrock Town Center being demolished for major redevelopment.
National big-box retailers will continue to expand with caution in 2019, and the market should see moderate levels of activity in prime locations.
The vacancy rate will remain stable below 12.0% throughout the year.