RETAIL SALES GROWTH
Tuesday's Commerce Department report of a major boost in U.S. retail sales in July, combined with a stronger-than-expected jobs report earlier this month, suggests that the U.S. economy continued its slow but steady expansion in the third quarter.
Usually, record highs in the stock market, strong economic indicators and stable fundamentals across U.S property and capital markets would be cause for investors to plunge headlong into the property market. However, political and macroeconomic uncertainty is generally causing CRE investors to pull back from riskier opportunities amid elevated pricing and limited opportunities to deploy capital.
The U.S. added a higher-than-expected 209,000 jobs in July, posted a record 83rd consecutive month of net jobs creation as the national unemployment rate fell to a 16-year low of 4.3%. Additionally, the Commerce Department on Tuesday reported that U.S. retail sales jumped 0.6% in July, the largest monthly increase in seven months, following an upwardly revised 0.3% increase in June as consumers ramped up discretionary spending and purchased more vehicles.
Locally in the Western Suburbs we have as well been doing more retail deals as well as industrial. The once vacant industrial buildings (used by small shop owners) have a low vacancy rate. As prices 3 years ago were in the $4.50/sf/yr are know asking $8 - $9/sf/yr. Even though the state has yet to see how to make their clients (citizens) a viable solution to the problem of growth the market does move forward but at a sluggish pace.
The prime retail spaces have held their own as the wall street renters have a better financial staying power. I do want to point out as Amazon grows the need for more of a personal buying experience needs to be implemented or we will see some more businesses fail. I went into a auto parts store the other day and the employee had no interest in helping me. I got on Amazon in the store and ordered the air filters for my wife's car. Too bad the corporate headquarters can't figure that out. We have 4 auto parts stores in Yorkville which has 17,000 population. You would think the manager of the store would see the need to beat the competition but I was talking to the store manager. Sometimes paying less you get less in regards to employees.