The top five “buy markets” in the retail sector are clustered in two states.While there’s plenty of booming markets for retail real estate across the United States, some markets stand head and shoulders above the rest. So which ones are at the top of the charts?
As The Business Journals shares, the top five “buy markets” in the retail sector are clustered in two states, and they just happen to be two states that have some incredible developments in the pipeline. Those two states are Florida and Texas, and you’d be hard pressed to find talks of a retail downturn in these five markets.
Business is booming, which is of course bolstered by strong demographics, housing metrics, population growth, and overall stronger economies. Those factors combined have led to low vacancies across the sector, and that doesn’t show signs of letting up.
In Florida, business is booming in the areas of Miami, Fort Lauderdale, and Tampa. Down in Texas, Houston and Austin are enjoying some serious boom times of their own. As Peter Muoio, chief economist at Ten-X, explains, there are plenty of signs that show this trend will last in the Sunshine State.
“Their economies are now much stronger, but their real estate markets generally are quieter or earlier in the development process, so they don’t have as much supply risk as some of the other parts of the country,” he said.
For these three particular Florida hotbeds, they share specific characteristics that help them stand apart from the rest.
“The combination of a much stronger demographic backdrop and less supply risk is one of the reasons why these three Florida markets rose to the top,” Muoio continued. “The combination of all these things are in the right place on the charts of both demand and supply.”
Deep in the heart of Texas, a similar story is playing out. Stable characteristics and growth are making the markets of Austin and Houston quite appealing to retail heavyweights, and that’s in spite of some changes to the overall economic makeup of the surrounding area.
“As a result, the retail sector has been more resilient than where there’s a direct impact from job losses in the oil industry and related businesses,” said Muoio. “That’s a good thing because even in Houston, where it hit an air-pocket as a result of the oil bust, that lack of too much supply has helped keep it resilient while the demographic support is still there,”
As for Austin, Muoio notes that the city is in a “sweet spot regarding strong demand coming from population growth and income that’s being generated in the tech industry.”