Retail Market Update – Q1 2025 – Nationwide Overview & Orlando Highlights
Q1 2025 Market Overview
Nationwide
- Leasing Remains Steady Despite Store Closures: Over 8,700 closures were announced in 2024, yet national vacancy remains low as backfill demand keeps space turning quickly.
- Limited Construction & Supply Constraints: Retail development remains slow, with just 81M SF delivered annually since 2020. High construction costs and interest rates continue to limit new supply.
- Rent Growth & Tenant Demand: Asking rents hit a new national high of $25.47/SF, with continued strength in Sun Belt markets. Time on market for vacant space fell to 7.9 months—the fastest in a decade.
- Sales Volume & Investor Sentiment: Quarterly sales volume dipped, and pricing softened to $212/SF. Cap rates have stabilized for net lease properties, potentially signaling the end of a multi-year upward trend.
Orlando
- Strong Fundamentals, Limited Space Vacancy in Orlando sits at just 3.6%, well below the national average. Rent growth remains solid at 2.9% year-over-year, outpacing the U.S. average of 1.8%.
- Tight Supply & Leasing Momentum: Only 8% of available space was built after 2010, and vacancy in 4- and 5-star freestanding product is just 0.5%. Despite a slowdown in net absorption, demand for quality space is high.
- Investment Activity Remains High: Orlando recorded $1.3B in retail investment over the past 12 months, placing it among the top 15 U.S. metros. Most deals were under $5M, with NNN pricing staying tight due to limited supply.
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