Pacific Place in Seattle, highest-performing retail sales city during the pandemic.
Only 11 metros in the United States equaled or surpassed their average retail sales growth rates from the previous five-year period. Thirty-five failed to equal the standard growth rates they achieved from 2015 to 2019, with four of them falling 10% below their paces, according to Marcus & Millichap’s 2021 U.S. Commercial Real Estate Outlook.
Las Vegas, New Haven-Fairfield County, Detroit, and Riverside-San Bernardino were the metros 10% off the pace. Boston fell back 9% and New York and Pittsburgh sank by 8%.
Retail sales in Seattle-Tacoma, meanwhile, grew by 16% during the pandemic. Three other cities—Salt Lake City, Chicago, and Phoenix—outpaced their five-year averages by 10% or more.
Marcus and Millichap identified five classes of cities for retail sales performance during the pandemic:
Sustained Momentum: High-growth markets insulated from the downturn including Seattle-Tacoma for the strength of its tech sector and Raleigh with its strong Research Triangle. Other high performers are expected to be Charlotte, Salt Lake City, Tampa-St. Petersburg, and Indianapolis.
Demographic Tailwinds: These include metros like Austin, Atlanta, and Sacramento that have been popular destinations for workers leaving bigger cities. Houston, Orlando, Austin, Columbus, and Miami-Dade fall into this category.
Short-Term Setback: The more densely populated markets that were hard-hit by COVID-19, but among the first to recover. Count Boston, Cincinnati, Northern New Jersey, Minneapolis, Portland, Orange County, and San Jose in this group.
Pressured Fundamentals: Cities like New York, Philadelphia, San Antonio, St. Louis, Denver, and Kansas City that were severely hampered by the pandemic and are expected to continue to perform below par in sales growth.
Protracted Recovery: The major metros that face the longest path to recovery. In this group, one finds Cleveland, San Francisco, Los Angeles, Washington, D.C., and Pittsburgh