CompStat: A 71.5% Retail Premium, and SF’s AI Rent Gap Widens

Economic News/Updates

Tariffs and Trade:

• U.S. imports of goods rose 16.7% year over year in June, the third straight month of growth, following gains of 15.4% in May and 10.2% in April, marking a sharp reversal from the eight consecutive months of declines spanning August 2025 through March 2026.
• Container volumes rose in June at major ports: Los Angeles surged to just over 1 million TEUs, its second-highest month ever, and New York/New Jersey hit about 769,000 TEUs, up 12% year over year.

Labor Market Conditions:

• Initial jobless claims fell in July 2026, averaging around 203,250 per week, down from June’s 222,500 average, though claims ticked up slightly in early August to about 206,000 through the week of August 15, remaining within the same broad range that’s held for much of the past year.
• Unemployment eased to 6.92 million in July, the lowest since January 2025, down from 7.09 million in June, as office-using employment held near 1.81 million in June and government employment rose to 823,000, the highest since June 2025.

Consumer Sentiment and Inflation:

• The Federal Reserve Bank’s Survey of Consumer Expectations showed consumers pulled back slightly on near-term inflation in July, with the median one-year outlook settling at 3.6%, down from June’s 3.7% high, while the three-year measure held at 3.3% for a second straight month, a level unseen since June 2022.
• Consumer sentiment rebounded to 49.5 in June, up from May’s cycle low of 44.8, but remained below April’s 49.8, suggesting the three-month decline into May may be losing steam even as the level stays historically weak.

State of the Economy and Recession Risk:

• Real GDP growth slowed to a 1.5% annualized rate in Q2 2026, down from Q1’s 2.1% rebound and Q4 2025’s near-stall of 0.5%, continuing a pattern of strong quarters followed by sudden pullbacks with no clear trend yet emerging.
• Retail sales fell to $229.4 billion in July, down 0.7% from June, the first monthly decline since January, snapping five straight months of growth, though sales remain up nearly $4.5 billion from January’s low.

Office: San Francisco’s AI Boom Is Rewriting Its Office Rent Curve

San Francisco’s office market has been reshaped by an unprecedented AI leasing wave, according to a recent The Real Deal article. AI companies now hold roughly 413 tenant footprints across the city’s office stock, up from just 23 before ChatGPT’s late-2022 launch, with growth concentrated in trophy and Class A buildings that has helped tighten overall market conditions.

CompStak data confirms that concentration is showing up directly in pricing. Over the last 12 months (Q3 2025–Q2 2026), leases signed by AI tenants in Prime Class A buildings averaged $92.76/SF, up 26.5% from $73.32/SF in the prior 12-month period, far outpacing the 5.5% gain seen across all Prime Class A leasing citywide ($97.13/SF, up from $92.10/SF). AI tenants overall, including those outside Prime Class A, grew more modestly, averaging $78.71/SF versus $76.07/SF a year earlier, a 3.5% increase, suggesting the sharpest rent gains are concentrated specifically where AI demand meets top-tier space. At the other end of the market, leases signed by non-AI tenants in non-Prime Class A buildings actually declined 8.0% year over year, to $63.88/SF from $69.41/SF, underscoring a widening gap between the segments of the market AI tenants are targeting and everything else.

Industrial: DHL’s West Valley Industrial Expansion Is Following Where Data Centers Are Locating and Driving Bulk Activity

Third-party logistics provider DHL Group has leased more than four million square feet of industrial space in Phoenix’s West Valley so far in 2026, according to a recent Phoenix Business Journal article, including a 1.14 million-square-foot building at VanTrust’s VT 303 North in Glendale, plus four other large leases signed earlier in the year. Every one of DHL’s new West Valley warehouses sits near Luke Air Force Base, where QTS is developing a three million-square-foot, 16-building data center campus and Microsoft is building out its own campus nearby. The Wall Street Journal has reported DHL plans to open 10 warehouses totaling more than seven million square feet across North America specifically to assemble and transport data center racks for cloud providers and equipment makers. Fluidstack, a data center supplier partnering with Anthropic, also leased over a million square feet in the same corridor in June.

CompStak data shows this convergence of bulk logistics and data center-driven demand may have compressed rent upside in Glendale/Peoria, the West Valley submarket that includes DHL’s newest lease at VT 303 North and sits closest to the Luke AFB data center corridor. Market rents on active Phoenix industrial leases run 29.9% above current in-place rent outside Glendale/Peoria, versus a narrower 25.4% spread inside it. That gap widens further for large-format leases of 200,000 SF or more in both segments: to 41.3% elsewhere in Phoenix and to 30.0% within Glendale/Peoria, showing that bulk tenants carry more locked-in rent upside than the market overall regardless of submarket. Even so, Glendale/Peoria’s large-format spread still trails the rest of Phoenix by more than 11 points, suggesting the submarket’s rents may have already caught up to the demand DHL and its data center neighbors are driving, even as leasing activity keeps accelerating.

Retail:  Non-Grocery Co-Tenants Are Where the Rent Premium Lives

MCB Real Estate and Osiris Ventures’ “Century Marketplace” redevelopment, built on the former Bay Ridge, Brooklyn Century 21 flagship site, just signed a 44,000-square-foot Burlington lease alongside a 16,000-square-foot lease with an unnamed national grocer, according to a recent Bisnow Deal Sheet. The 120,000-square-foot project is now 65% preleased.

CompStak data shows this pairing of a grocery anchor with non-grocery co-tenants is where the real rent premium sits, not with the grocer itself. Across active leases nationally, non-grocery tenants in grocery-anchored retail centers pay a weighted average current rent 53.0% above the grocery anchor’s own in-place rent. In New York City specifically, that spread widens to 71.5%, meaning the co-tenants surrounding a grocery anchor in NYC pay meaningfully more, relative to the anchor, than they do nationally.

The premium also varies significantly by which grocer anchors the center. Nationally, non-grocery tenants pay the largest premiums over anchors like Kroger (169.0%) and BJ’s Wholesale Club (146.3%), while the smallest premiums show up alongside Trader Joe’s (18.8%) and The Fresh Market (24.4%), according to CompStak data, suggesting landlords price co-tenant space differently depending on the specific grocery draw. For a project like Century Marketplace, where the named grocer isn’t yet disclosed, this data points to a wide range of possible outcomes for how a tenant like Burlington’s space gets valued relative to its grocery neighbor.

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