Grocery Tenants Help to Prop Up Retail Rents

Grocery and pharmacy tenants have helped to prop up average retail rental rates during the pandemic. According to a new report from Moody’s Analytics REIS, retail rents in the US declined .5% to .6% during the pandemic in neighborhood and community retail centers, a relatively nominal drop considering the economic shock. The report attributes this to the fact that many of these neighborhood centers are often anchored by grocery stores or pharmacies, which have not only stayed open during the pandemic but performed well. Ultimately, that has help to keep retail rents up.

Suburban markets seem to be getting hit harder by the pandemic. In the report’s ranking of the worst performing markets, Charleston and Central New Jersey are tied for the top position with rents down 1.8%. Albuquerque came in next with rents down 1.4%, and Ventura County and Fairfield County rounded out the list of worst performing markets with rents down 1.2% and 1.1% respectively.