2022 Year-in-Review

The retail industry remained in expansion mode in 2022 as consumers and retailers remained resilient despite concerns over inflation, interest rates, and a potential recession. Tenants signed leases for over 193 million square feet of retail space during the year, driven by the growth for smaller spaces, as the average footprint leased hovers near the all-time historic low of just over 3,000 square feet. In addition, retailers only shuttered 20 million square feet of retail space during the year, the lowest total recorded since the Great Financial Crisis. The combination of strong leasing volumes and a significant reduction in move-outs drove net absorption to its highest levels in six years at 80.5 million square feet.

Total retail sales increased by 9.2% in 2022, the equivalent of Americans spending $683 billion more than they did in 2021, as rising prices due to inflation weighed heavily on consumer sentiment. Retail availabilities declined in 2022 as the demand for quality space rose, and new retail deliveries remained minimal. The overall vacancy rate stood at 4.2% at the end of the year, decreasing by 40-basis points year-over-year, with grocers, discounters, off-price retailers, and experiential tenants driving activity.

Colliers Insight
Nicole Larson
“The average lease size will continue to decline as retailers look to shrink overall footprints and expand with smaller-format store concepts, maximizing their impact in each market while lowering costs.”

Trends to Watch in 2023

U.S. National Retail Forecast