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Retail Demand Projected to Cool This Year Following Blockbuster 2023

The vacancy rate is at its lowest level since 2007.

By Kathy Rembisz | January 19, 2024

National shopping center vacancies dropped 10 basis points to reach 5.3% in the fourth quarter of 2023, marking the lowest overall retail vacancy rate since 2007, according to Cushman & Wakefield.

“Shopping centers have shown incredible resilience and adaptability, continuing to attract a diverse range of businesses,” said Barrie Scardina, president of Americas Retail Services.  Scardina cites the surprisingly strong economic growth in 2023 as the reason for healthy demand for retail space.

Net absorption totaled 6.1 million square feet in the fourth quarter. This was up 71% from the previous quarter.

Since the start of the pandemic, lack of new construction has kept shopping center vacancy rates low. In 2023, retail completions slumped to a low of just over 8 million square feet delivered, 20% of which was delivered in the fourth quarter.