plant sprouting out of money - retail sales growth

5 Smaller Markets on the Rise

We’ve been talking a lot recently about retailers’ quest for urbanization. But with urban retail comes a hefty price tag.

Some locations are so expensive in fact that retailers and restaurants are given no other choice but to leave them for less expensive places.

Crate and Barrel, for example, is closing its flagship location on Madison Ave. in Manhattan, 5 years before its lease even expires.

While brands certainly want footfalls and eyeballs, there are markets that are less expensive but still provide the desired return on investment.  

Given that, it’s helpful to look at the markets that are experiencing the greatest year-over-year growth in investment sales volumes.

While the usual suspects like Manhattan, Los Angeles, and San Francisco saw the highest investment sales volume in the retail real estate sector during the first half of this year, the markets with the greatest growth in sales volume were actually smaller cities, some of which may not immediately come to mind when thinking about the hotbeds of commercial real estate activity.  

Here are the 5 smaller markets that are becoming increasingly popular with investors:

  • Raleigh/Durham, N.C. – Raleigh/Durham had a 97% increase in investment sales volume in the first half of 2015, reaching $2.3 billion.
  • D.C./Virginia Suburbs – The Suburban D.C./Virginia market, also popular with investors despite recent government cutbacks, has seen growth of 99% with total investment sales volume of $4.5 billion in the first 6 months of 2015.
  • St. Louis, Mo. – St. Louis experienced a 126% increase in investment sales in the first half of the year, to about $1.6 billion.
  • Palm Beach, Fla. – This Southeast market jumped 159% in investment sales, to reach about $2 billion.
  • Orlando, Fla. – At 232%, Orlando’s investment sales growth was the largest increase in the first half of 2015. During this 6 month period, this city saw more than $4 billion in retail investment deals close.  

A Reminder for Retailers

Whether you’re looking to expand your presence in urban markets, rural markets or something in between, you need to pick the best markets and select the best site locations within those markets for your individual brand. Don’t fall into the trap of assuming you need to have a location in a particular market.

If you’re interested in finding the best new site locations in the right markets for your brand, then let’s discuss how customer analytics can help. 

Journey Awareness Persona Real Estate Retail