Myrtle Beach Retail Market: Growth Amid Stability
The Myrtle Beach retail market is holding strong with a vacancy rate of 3.0%, which is 0.3% lower than last year. Over the past 12 months, there has been 510,000 SF of positive absorption and 400,000 SF of net deliveries. Rents have increased by 4.5% to approximately $17.70/SF.
Current Construction and Sales: There are currently 100,000 SF under construction. In the past year, 152 sales have occurred, totaling about $148 million in volume.
Vacancy Rates and Absorption:
General Retail: Vacancy at 1.1%, with 380,000 SF absorbed.
Malls: Vacancy at 15.9%, with 1,000 SF absorbed.
Power Centers: Vacancy at 5.6%, with 560 SF absorbed.
Neighborhood Centers: Vacancy at 3.1%, with 110,000 SF absorbed.
Other Retail Buildings: Vacancy at 4.9%, with flat absorption.
Rent Trends:
General Retail: $16.30/SF, with 4.0% growth.
Malls: $22.00/SF, with 4.5% growth.
Power Centers: $20.00/SF, with 5.5% growth.
Strip Centers: $16.50/SF, with 4.3% growth.
Neighborhood Centers: $18.70/SF, with 5.4% growth.
Other Retail Buildings: $19.90/SF, with 4.4% growth.
Market Performance: Current vacancy rates are lower than the trailing three-year average of 3.6%, and the national average of 4.3%. Rents have surged 16.3% over the past three years, outpacing the national average of 11.3%. Over the past three years, there have been 603 sales, amounting to $611 million in volume and 4.5 million SF of inventory. CoStar estimates the average cap rate for Myrtle Beach at 7.4% over the past three years, slightly higher than the current 7.3%.
Market Metrics:
Total Inventory: 41.7 million SF
Market Asking Rent/SF: $1.47 (Myrtle Beach) vs. $2.08 (National)
Vacancy Rate: 3.0% (Myrtle Beach) vs. 4.1% (National)
12 Mo Net Absorption SF: 507K (Myrtle Beach) vs. 37.7M (National)
Market Sale Price/SF: $174 (Myrtle Beach) vs. $249 (National)
Market Cap Rate: 7.3% (Myrtle Beach) vs. 6.9% (National)
Sales Insights: There were 152 sales in the past year, totaling $148 million and 740,000 SF. Sales averaged $175/SF, slightly above the market price of $174/SF. Over the past three years, Myrtle Beach averaged 205 sales per year, totaling $195 million annually. The market's transaction cap rate stands at 6.8%, above the national average of 6.6%.
Cap Rates by Property Type:
General Retail: 7.3%
Malls: 7.1%
Power Centers: 7.4%
Strip Centers: 7.3%
Neighborhood Centers: 7.5%
Other Retail: 7.1%
Economic Outlook: Myrtle Beach is one of the fastest-growing metros in the country, with job growth averaging 17.0% per year over the last three years. This growth rate is nearly 300 basis points higher than the national average. The trade, transportation, and utilities sector has seen the fastest growth, thanks to improved infrastructure and business-friendly policies. Major employers include Coastal Carolina University, Conway Medical Center, and Kyocera.
The aviation and aerospace industries have also seen significant growth, with companies like Kingman Airline and Chippewa Aerospace establishing operations in the region. The International Technology and Aerospace Park has become a hub for training and talent development in these industries.
Leisure and Hospitality: Leisure and hospitality continue to be economic drivers, with regional sector growth supporting robust household growth. Household growth in Myrtle Beach has outpaced national trends, tripling the nation's development rate over the past three years. These trends are expected to benefit the region's commercial sectors in the near future.