Commercial real estate services firm Grubb & Ellis forecasts U.S. retail sales and leasing to “ramp up gradually” this year, according to the company’s 2011 Real Estate Forecast, published in January. In terms of leasing, retailers are repositioning stores to more high-profile locations to take advantage of favorable rental rates, and vacancy rates are expected to begin coming down from a 10+% peak.

In terms of sales, an uptick in consumer spending is aiding luxury retailers more than big-box discount retailers so far. Neighborhood centers in higher-income areas with a strong grocery anchor are holding up better than unanchored strip centers on the suburban fringe. Grubb & Ellis’ forecast also includes a metro retail market strength analysis for 2011-2015.

The metros scoring highest tend to be those with strong employment prospects, plus relatively scarce developable sites for new construction. Most of these metros are on the East and West Coasts, with Washington D.C. and Los Angeles leading the way. The implication for ULI members is that coastal markets will likely lead the recovery in the retail sector. Here are Grubb & Ellis’ Top 10 retail markets for 2011-2015, scored on a 0-to-100 scale based on 17 property, economic and demographic variables:

Rank

Metro

2011-2015 retail strength score

1

Washington D.C.

87.0

2

Los Angeles

83.3

3

New York City

73.1

4

San Francisco

72.8

5

Portland, OR

70.0

6

San Diego

69.8

7

Boston

69.3

8

Long Island, NY

69.2

9

Chicago

68.9

10

Seattle

65.2

(Source: Grubb & Ellis.)