A vacancy rate of just 2.2%. That’s a sign of just how strong demand is in the Madison retail sector, according to the latest research from Lee & Associates.
In its second quarter Madison retail report, Lee & Associates said that the local retail market continues to operate under tight conditions, with demand for space strong. The challenge? With a vacancy rate that low, it can be difficult for would-be tenants to find space.
This lack of space is constraining retail leasing across the Madison region, Lee & Associates reported.
Despite the supply-side challenges, though, investor interest in Madison-area retail space remains strong, Lee & Associates reported. In its report, Lee & Associates said that retail property sales rose 25% in the second quarter when compared to the first three months of the year.
Unfortunately for both investors and tenants, new retail construction in this market has slowed to an all-time low, according to Lee & Associates. The reasons for this slowdown? Lee & Associates points to a combination of shifting consumer behaviors, rising material costs and higher interest rates.
According to the Lee & Associates’ report, there was only 20,950 square feet of new retail space under construction in the Madison market as of the second quarter. Lee & Associates also reported 37,558 square feet of net absorption in the retail space during the quarter.
