Though Puget Sound retail market growth slowed in Q4, 2018 remained a strong year overall for the region.
Lack of development continued to compress retail vacancy.
Nationally, retail sales figures saw positive outcomes in October and November, posting 0.8% and 0.2% gains, respectively. However, U.S. retail sales fell 1.2% in the critical month of December — their worst drop since the end of the recession — and sales totals for product categories excluding gasoline and automobiles posted their lowest numbers since Spring 2009. Amazon continued to challenge, with news that the online retailer is looking into opportunities to place new Whole Food Markets into empty Sears locations and open additional Amazon Go stores. Currently, Amazon Go has four locations in Seattle: two in Lake Union and two in the CBD. The changing face of Northgate Mall made headlines in the Puget Sound over the past quarter. The design team of GGLO, KPFF, CallisonRTKL, and Generator Studio received a second round of approval for their redevelopment of parcels at the shopping center. Altogether, this redevelopment will incorporate a 262,000-SF ice center for Seattle’s newly awarded NHL team and over 1.3 million SF of office, retail, and residential space. After JCPenney announced it would close its Northgate location in 2019, Macy’s also confirmed a similar closure for 2020. Simon Property Group’s CEO David Simon has stated that malls can grow and thrive without department stores, so how those large vacancies evolve will be an interesting trend to watch. On the Eastside, the 400,000-SF Village at Totem Lake recently signed 203° Fahrenheit Coffee Co. and Vince’s Nail Spa as tenants in addition to Whole Foods and ULTA Beauty when the retail portion of the development delivers in 2020.
For more details on the Puget Sound retail market's performance in the final three months of 2018, download the full report at the link above.