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Rising Populations Boost Retail in Sunbelt, Squeeze Inland Midwestern Markets

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Rising Populations Boost Retail in Sunbelt, Squeeze Inland Midwestern Markets

Although much of the U.S. has been “over-retailed” for decades, new findings from Colliers suggest that migration patterns during and after the coronavirus pandemic may be opening (and closing) doors for retail investors across the country.

An analysis of real estate markets with at least 300,000 people as of 2024 found that retail per capita has decreased drastically in fast-growing cities in the Sunbelt, such as Austin and Myrtle Beach. Meanwhile, midsize markets in the Midwest and Great Lakes areas, which have experienced population declines since 2000, are seeing the opposite trend, with increases in retail per capita.

Aaron Jodka, Colliers’ research director for U.S. capital markets, noted that the aggregate level of retail in the country, on a per capita basis, has decreased by just one square foot—from 57 to 56 square feet—since the mid-2000s. This suggests that retail development has remained relatively aligned with population growth.

“Identifying areas with strong population gains and declining retail square footage per capita metrics could prove fruitful for development,” Jodka said. “Markets with below-average space to begin with suggest higher barriers to entry, making them even more intriguing.”

Retail square footage per capita has decreased by 26 square feet in Myrtle Beach, while Raleigh and Austin have seen decreases of 11 square feet. That figure in Fort Walton Beach, Fla., Charleston, S.C., and Wilmington, N.C., declined by 10 square feet. Other markets, including Provo, Utah, Lakeland, Fla., Greeley, Col., and Seattle, WA, saw retail per capita decrease by seven square feet.

Colliers’ findings align with a recent report from Placer.ai on Myrtle Beach and South Carolina’s Grand Strand, which found that net migration increased by 12.9% between Q1 2020 and Q1 2024. A separate study from CBRE highlighted that migration to North Carolina’s Research Triangle, coupled with population and household income growth, has been a boon for retail investors.

On the other hand, Colliers found that Shreveport, La.; Flint, MI.; Youngstown, Ohio; Peoria, Ill.; Jackson, Miss.; and Canton, Ohio have seen retail space per capita increase by eight to 11 square feet from the mid-2000s to 2024. These markets have continued adding retail inventory despite population declines—or, in the case of Jackson, only modest growth, Jodka said.

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