2024 Retail Fit Out Cost Guide

EXECUTIVE SUMMARY

Cushman & Wakefield’s Retail Fit Out Cost Guide provides cost estimates for an in-line store fit out for 14 different major markets in the U.S. We also examine current construction trends that impact costs and retail market fundamentals.

> Construction costs continue to level out, but uncertainty remains . High interest rates have placed additional pressure on costs; however, expectations that the Fed is finished raising rates may bring some clarity. In the near-term, expect rates to remain high and continue to impact construction project plans. > Pandemic-fueled commodity price increases have abated, but strong demand continues to apply pricing pressure on select commodities. > Labor constraints apply upward pressure on costs, as companies continue to increase wages and benefit packages to attract construction talent. > Project timelines continue to be impacted by extended equipment lead times and labor constraints.

> Robust retail growth—driven in part by strong consumer spending—has resulted in positive absorption since 2021 and decreasing vacancy rates in most U.S. markets. > Inventory is increasingly constrained, as the construction pipeline remains subdued . > Retail developers have been hindered by rising costs, making it difficult to meet the increasing demand for retail space . Some of this demand will be offset by freed-up space following several recent bankruptcies of large retailers. > In-line store fit out costs average $147 per square foot (psf) nationally. Fit outs are costliest in Northern California, averaging $216 psf, and most cost-effective in the Midwest, averaging $106 psf.

4

Cushman & Wakefield