For the first time since 2006 the retail availability rate across America’s central business districts (CBD) today is higher than in the suburbs. Chalk it up to another enduring effect of the rise of remote work. With workers only venturing into the office a few days a week, it’s no surprise that spending is being re-directed to retail districts closer to where people live.
This has resulted in an uptick in CBD retail availability, even while suburban availability has fallen, upending a well-established pre-pandemic trend whereby urban and suburban fundamentals were closely correlated.
Urban retail may be down, but it is not out. Weekend spending has increased in the CBDs, likely bolstered by sporting and cultural events, and consumer activity is picking up in many urban neighborhoods adjacent to CBDs. Nevertheless, downtown availability rates are drifting toward a new equilibrium in the absence of a five-day, in-person work week.
By Matt Mowell, Daniel Diebel, Dennis Schoenmaker, Ph.D.