During the health-care crisis, retail fundamentals remained stable. Prior to the pandemic, Orlando experienced job growth that was double the national rate, resulting in a measure of resiliency throughout the health crisis.
Retail vacancy in the market has never exceeded the national threshold in any quarter this year. Tourism was able to return in the first half of 2021 as a result of widespread vaccinations, which complemented job growth and demand for retail space in the city. As the unemployment rate has gone below 5% in the last four quarters, net absorption has nearly doubled from the previous year’s figure.
As Orlando’s population and household formation continue to expand, retail fundamentals should continue to improve. Pricing adjustments, low levels of new construction, and advantageous investment in the best experiential and convenience-led centers have all contributed to the effects of a longer-term transition in retail. The demographic and pandemic-induced migration to the suburbs will benefit grocery-anchored and neighborhood centers, with sales-to-square-footage ratios soaring.
There should be decade-high level of retail investment volume in 2022, thanks to forward returns now available. Core retail sales were up 14.9% year over year and 20.9 percent higher than pre-pandemic levels. Even after accounting for inflation, core retail sales are up 10.8% year over year and 15.7 percent since the pandemic began. Internet sales were up 10% over last year and up 40% over pre-pandemic levels, indicating that the retail sales boom was mostly due to the internet. However, the belief among investors that e-commerce is to blame for the majority of the gains is incorrect.
On an inflation-adjusted basis, core brick and mortar retail sales are up substantially at 9.3% more than a year ago and 13.8 percent higher than pre-COVID levels. With more and more unique concepts setting foot to the ever growing metropolitan Orlando – the retail sector is still seeing great advantageous opportunities.