Retail vacancy rates in the U.S. 2019-2022

In the United States, vacancy rates across the retail sector hit an average of 4.4 percent in the second quarter of 2022. Physical retail locations, such as shopping malls and free-standing stores, suffered a particularly heavy blow from the COVID-19 pandemic.

Brick-and-mortar retailers hit the hardest

Vacancy rates have increased across a number of sectors in the U.S. during 2020, but none more so than the retail industry. Lockdown restrictions implemented across the country to contain the spread of the coronavirus led to steep declines in physical retail sector traffic. Retailers are once again open for business, but many stores are operating at a much lower capacity due to new health and safety guidelines. However, the reopening of the economy has come too late for some, and there have been widespread retail store closures.

Greater demand for industrial real estate

Many vacant retail buildings could soon be repurposed as industrial properties. Demand for warehousing and flexible spaces has remained relatively high throughout the COVID-19 pandemic, and one reason for this is the sales growth of eCommerce platforms. Industrial properties are ideal for online startups that require extra storage and distribution space. Industrial vacancy rates stood at an average of 4.1 percent in the first quarter of 2022, which was lower than several other sectors.