Retail’s Rebound Begins | Winter 2024

Following a period of cautious optimism about the retail market, the Winter 2024 Forecast finds that respondents are now bullish on the opportunity set for retail, with 80% expecting demand to grow faster than supply. This shift in sentiment is largely driven by limited new development of retail space over the last decade paired with growing retailers’ interest in expanding their physical footprint, ultimately increasing competition for space and rent costs.

As the retail market begins its resurgence, more than 50% of the Forecast respondents expect to initiate at least one new development project in 2024. Nearly half of respondents (46%) will prioritize residential-serving retail development in the coming years, especially as remote- and hybrid-work models drive demand for neighborhood-centric retail options such as grocery and convenience stores.

Jonathan Lorenzen, partner at Allen Matkins, said: “New retail development projects will largely be influenced by the end customer, with spaces designed to maintain consistent foot traffic and, in turn, drive tenant demand. Whether it’s an urban storefront or a suburban neighborhood shopping center, developers must closely consider how a project’s location and amenities will support a convenient shopper experience that drives repeat business.”

See more insights in the Winter 2024 Allen Matkins/UCLA Anderson Forecast California Commercial Real Estate Survey.