IRR-Washington D.C. Mid-Year Viewpoint 2015 Local Market Report - Retail
The demand for retail space has continuously improved for the past 5 years. However, the retail market has become segmented with quick service, casual dining, and discount retailers leading pack. Although gross sales are the highest in years, strong competition and rising costs have trimmed earnings. Vacancy and rental rates continue steady improvements for core Washington, DC region, but little improvement has occurred in many x-urban markets.
Development activity in the Washington region has been confined to a handful of very large developments. Leading anchor tenants continue to be Wal-Mart, Target, Lowe’s Home Improvements, Harris Teeter, Whole Foods, and Wegman’s.
The capitalization rates for strong grocery-anchored centers are at all-time lows. Despite concerns about “big box” retailers, there have been recent transactions that have demonstrated substantial capitalization rate compression for power centers. Although downward capitalization trends have been wide-spread, the spread between Class A and B/C properties remains elevated (200 to 300 basis points) in part because of the interest rate sensitive buyer segment.
Download the full version PDF of this Local Market Report below. It includes graphs and tables.
IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.