Sun Belt metros led the nation in grabbed-up retail space, with Orlando being the most active market. It experienced 1.2 million sq. ft. of net absorption in the quarter, followed by Phoenix with 630,000 sq. ft. and Los Angeles with 600,000 sq. ft.
Orlando also paced the U.S. with year-to-date absorption of 2 million sq. ft. Phoenix and Houston came in second and third with totals very close to that mark.
New construction levels continued their fall during the quarter with a quarter-over-quarter decline of 28% to just under 5.6 million sq. ft.—the second lowest total on record. Noting that high construction costs will continue to delay development in Q4, CBRE predicts that 2023 will finish as the fourth consecutive year of record-low retail construction levels.
Sun Belt markets, though, will continue to rise above national trends, according to CBRE. The company’s research department reports that more than 5 million sq. ft. of retail space has been built so far this year in Houston, Austin, Miami and Orlando.