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Retail vacancy rates in the Capital Region are still in good shape, despite their rise from 7.17% in 2022 to 8.02% in 2023.
Charlie Colvin of Momentum Commercial Realty provided a market overview at the annual TRENDS seminar this morning sponsored by the Greater Baton Rouge Association of Realtors.
“It’s up from the record low, but still a really healthy number,” Colvin says of the vacancy rates.
Colvin pointed out the challenges the retail market has faced, starting 25 years ago with E-commerce sales.
“We’ve been through the Great Recession and the COVID-19 pandemic,” Colvin says. “Just when things were starting to improve, we got hit with the three I’s: interest rates, inflation and insurance.”
Colvin notes an increase in retail bankruptcies over the last year. There were 24 in 2023, compared to five in 2022. Brick and mortar retailers and digitally native brands struggled in the higher interest rate environment to meet their service obligations.
Despite the bankruptcies, store openings outpaced the number of stores closing for the third straight year. Bed Bath and Beyond closed over 800 stores, but many of those buildings were leased again by retailers looking to expand, Colvin says. One local example is Barnes & Noble in the Juban Crossing Shopping Center in Denham Springs, which recently took over the Bed Bath and Beyond space.
Some retailer challenges include organized retail crime and consumer debt, which is expected to reach a record-high of $1.1 trillion this year.
Notable developments include a letter of intent on a 32,000-square-foot building in the Rouse’s parking lot on Florida Boulevard at Ardenwood. In Heritage Crossing in Gonzales, Sonny’s BBQ, Agave Blue, and an 8,000-square-foot building that will include the Baton Rouge market’s first Five Guys restaurant with a drive-thru are expected to arrive by the end of the year.
