SVNIC’s 2016 Market Outlook Reports assess the current state of the national commercial real estate market, and identify micro-trends within specific geographic regions and industries for 2016. Today we are delving into the 2016 Top Retail Markets to Watch. Not the largest or the most actively contested markets, the 2016 Retail Markets to Watch are each at an important juncture that presents unique opportunities for investment. Together, they reflect the diversity of trends that is driving the economy and commercial real estate performance in markets across the country.
Top Retail Market to Watch: Spokane, WA
The economy of Spokane is attempting to recreate itself from a natural products producer to a more high tech and business-focused cluster but, so far, the results remain mixed. Unemployment has grown recently to 7.7% in January ‘16 but new job creation is occurring at a 1.7% annualized rate, according to the Bureau of Labor Statistics. Top sectors adding jobs include Information, Professional and Business Services, and Educational and Health Services, which are growing at annualized rates of 13.8%, 6.3%, and 3.6%, respectively. Population grew 4.2% from 2010 to 2015, according the Census Bureau, which means that overall demand for retail could grow. Still, sustained reductions in unemployment will need to be seen for significant growth to occur. As the tech industry grows, this is possible.
Stay Updated…
Over the next few weeks, the SVN Blog will be featuring posts that will focus on each of the top markets to watch for industrial, multifamily, office, and retail properties. SVN Advisors from selected top markets have provided their industry expertise regarding what to look out for in their specific market in the coming months. Don’t miss out on these important insights – subscribe to the SVN Blog on the right side of the blog homepage.
To read more on other top retail markets, download the full version of the 2016 Retail Market Outlook report here.
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Seattle is one of the fastest growing cities on the West Coast, with a population that grew 9.8% from 2010 to 2014, according the Census Bureau. Job growth continues at an annualized pace of 3.0% while unemployment has been stable with the latest reading in January ‘16 of 5.6%, according to the Bureau of Labor Statistics. Seattle is an expensive city to live in and as such approximately 54% of the housing units are rentals, according to the Census Bureau. The need for ample housing is real and multifamily assets should perform well for 2016 and beyond. Rents are expected grow over 5% as new supply hits record highs to fill new demand. The best sectors for job creation include Information, Leisure and Hospitality, Trade, Transportation, and Utilities, and Financial Activities, which are growing at 8.1%, 5.0%, 4.2%, and 4.1% annualized rates, respectively.
Seattle has experienced significant job growth since the recession and continues to add jobs at an annualized rate of 3.0%, keeping unemployment stable at 5.6% as of January ‘16, according to the BLS. As Seattle hosts major West Coast ports, a major airport, and excellent rail linkages, trade and distribution activities dominate the industrial real estate market. Employment in the Trade, Transportation, and Utilities sector is growing at an annualized rate of 4.2%, making up for losses in the Manufacturing sector that is contracting at an annualized rate of –0.9%. Overall, the Puget Sound ports and infrastructure should drive robust demand for industrial real estate as more and more ship traffic is routed up north from congested Long Beach, California.
