Retail markets across the U.S. Northwest Region continued to improve going into Fall 2022. In general, availability rates decreased across the region and rents continued an upward trend. Economic indicators showed strength in the economy in low unemployment and rising income. But looking ahead, there are a number of headwinds including high inflation, rising interest rates due to the Fed’s attempts to slow inflation growth, and the potential of an economic slowdown in coming months. Sustained high inflation has been a damper on consumers’ ability to spend and has impacted consumer expectations. During the third quarter of 2022, availability in the Northwest region fell to 22.2 million square feet, a 0.7 million square foot decrease. Total availability fell 10 basis points to 6.29 percent. Availability across the region has fallen every quarter since peaking at 7.19 percent in the second quarter of 2021. Markets with the greatest gains in absorption included San Francisco, at 176,000 square feet; followed by Sacramento, at 145,000 square feet, and Reno/Sparks at 119,000 square feet. Portland and the South Bay also recorded positive absorption figures at 116,000 square feet and 61,000 square feet, respectively. The East Bay and North Bay recorded the lowest demand metrics, tracking negative 254,000 square feet and negative 130,000 square feet. Average asking rents across the region totaled $22.96 per square foot, registering a minimal quarterly increase of 0.6 percent, and remained at the highest level since falling to $21.44 per square foot in the second quarter of 2021. Asking rents averaged 7.5 percent higher than the pre-pandemic figure for the first quarter of 2020.