While retail has been one of the strongest real estate sectors with relatively low vacancy rates, a study conducted by Principal Real Estate Investors, Real Estate Research Corporation and Torto Wheaton Research indicates those rates may be on the rise.

Retail Vacancy Overview

Source: Torto Wheaton Research

According to “Expectations and Market Realities in Real Estate 2005,” the national retail vacancy rate as of first quarter 2005 was approximately 8 percent, largely unchanged from 2004, but likely headed gradually higher, according to the report. By the end of 2007 vacancy rates are slated to hit 9 percent and continue escalating into 2008. This gradual increase is attributed to a combination of new supply and an expected decline in the rate of net absorption as retail tenants reassess the consumer spending outlook.