Demand for retail space surges to pre-pandemic levels

With over half of the population vaccinated and heading back out to stores and restaurants, retail saw a boom in the second quarter. While concerns over the Delta variant and supply issues pose challenges for continued growth at the current pace through the end of the year, 2021 should still tally serious economic and retail recovery from the doldrums of 2020.

Net absorption — or actual move-ins during the second quarter — totaled 20.1 million square feet, the highest level since the third quarter of 2018. Gains in net absorption were driven by strong demand for general/freestanding retail and neighborhood centers. Projected consumer spending growth of 8.8 percent for all of 2021 will be the strongest since World War II. Consumers are switching from large durable goods investment to services. Sales at restaurants and bars rose for the fifth straight month, by 1.5 percent in July, and are up 71.8 percent year-over-year during the second quarter.