A new report from retail real estate company DLC highlights the explosive growth of open-air retail in US suburban markets.
According to DLC, for the past 15 years, the gross leasable area in open-air retail has shrunk and continues to do so as construction costs have increased by between 30% and 40% since 2020.
This has resulted in an increase in competition for space among open-air tenants.
In 2023, DLC lease renewals for spaces in excess of 10,000ft² clocked in at 98%, and the average time to lease retail vacant space is at an all-time low.
Store openings exceeded closings in 2023 for the third consecutive year, with growth concentrated in the country’s suburbs and non-major markets.
Some major upcoming open-air retail projects in the US are Verrado Marketplace in Arizona, Belmont Park Retail Village in New York, and Montgomery Promenade in New Jersey.
DLC finds that the retailers driving this growth are value retailers, including T.J. Maxx, Burlington, Ross Dress For Less, and Five Below, which reportedly get two to three times more visits than overall retail.
Traditional shopping centre brands (such as Macy’s, Ulta, and Claire’s) are also said to be flocking to neighbourhood centres.
Retailers are also leveraging technology, improving shopping flow, enhancing efficiency, and updating aesthetics to elevate customers’ in-store experience.
DLC founder and CEO Adam Ifshin commented: “Open-air centres are located exactly where traditional and emerging retailers alike want to be – in the backyard of the consumer.”
“Open-air retail booms in US suburban markets” was originally created and published by Retail Insight Network, a GlobalData owned brand.
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