- 9 of the top 10 retail markets for 2024 are in the Sun Belt, highlighting the region’s growing appeal for consumers and retailers.
- Phoenix topped the list, followed by Orlando and Las Vegas, with each of these metros seeing strong rental growth, low vacancy rates, and solid returns on investment.
- Columbus, OH, was the only non-Sun Belt market to crack the top 10, thanks to major universities and sizeable corporate investments.
According to a CoStar study, 9 of the top 10 US retail markets are located in the Sun Belt, a region known for its favorable business environment, rapid population growth, and appealing climate.
Despite a generally “cold” retail market in 2024, these metros stood out with strong leasing activity, rising rents, and positive returns on investment, as reported by GlobeSt.
Sunny Storefronts
The Sun Belt’s retail dominance is due to a combination of encouraging factors, including high population growth, employment rates, and favorable tax policies.
Sun Belt cities also tend to have more affordable living costs than coastal gateway cities, making Southern hospitality more attractive to residents and retailers.
The study found that Phoenix, AZ, led the pack with impressive numbers: 2.5% of its retail inventory was leased, rents grew by 7%, and sales volume was up 6%. Orlando, FL, and Las Vegas, NV, rounded out the top 3, showing solid growth in asking rents, sales volume, and total returns.
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Odd One Out
Columbus, OH, was the lone non-Sun Belt market in the top 10, landing in the fifth spot.
Despite a -25.4% drop in sales volume, Columbus benefited from significant investments from major tech companies such as Intel (INTC), Amazon (AMZN), and Meta (META), along with the growth of Ohio State University. These factors contributed to a strong 10.1% total return.
Other Standouts
Other Sun Belt cities that performed well included Charlotte, NC, and Nashville, TN. Both saw strong returns on retail investments despite challenges in some metrics, such as sales volume.
On the flip side, Tampa, FL, suffered a steep drop in sales volume (-26.3% YoY) but still earned a solid 7.8% total return, suggesting that long-term prospects for retail properties remain strong.
Why It Matters
With strong fundamentals and robust returns, Sun Belt metros are poised to remain key players in the US retail market in the years ahead.
Retailers, investors, and developers alike are noting these trends, as consumer spending is also shifting to the South.egic way to navigate a challenging market,” said Colliers. Success lies in carefully planning for the unique needs of medical practices while ensuring financial viability and tenant satisfaction.
The blending of traditional office and medical tenants could redefine the future of office real estate, balancing innovation with practicality.
