As retailers clamor for top-tier locations, many aging storefronts go wanting, presenting a challenge for their owners, Alanna Loeffler, a senior managing director and leader of Cushman & Wakefield's Americas retail platform, told CoStar News at ICSC's retail real estate conference this week in Las Vegas.
Loeffler said she met with colleagues recently in New York who told her they're working with quality brands and retailers that want to be in top-notch retail space, but that it's been a struggle to find available options.
The 11.8 billion-square-foot U.S. retail sector has a vacancy rate of just 4.4%, and the industry is seeing "sustained competition for high-quality inventory," according to CoStar's latest report.
"There are only a handful of great retail locations that are available right now" because of the demand bifurcation between Class A space and other properties, Loeffler said. As a result, owners of Class B and Class C retail space are trying to determine how to best reposition their properties, she said.
Transforming some of the less desirable spaces into educational, medical and coworking spaces could provide owners with new opportunities at a lower cost than demolishing a center and rebuilding, Loeffler said.
Watch the video to see why Loeffler said she thinks developers are quickly building new retail space as demand for Class A retail grows and availability shrinks.