New York, NY, December 6, 2005--Retail vacancies will inch down to an average of 8.8 percent in 2006, and rent growth will gain momentum to 3.5 percent (from 2.5 percent this year), according to Bernard J. Haddigan, managing director and national director of Marcus & Millichap's retail group.
The positive trend is a result of the fact that tenant demand is driving 70 percent of the new developments planned for 2006, he says. As for retail property transactions, expect buyer demand to stay at record levels while cap rates remain near historical lows — in the low-to-mid 7 percent range for multitenant properties and between 6 percent and 6.5 percent for single-tenant properties on average, Haddigan says.
Retail property price increases will ease to between 8 percent and 10 percent next year from the 20 percent U.S. average experienced this year, he says. Marcus & Millichap releases its 2006 National Retail Outlook report this week.
