Twisted Titan
11th July 2010, 03:07 PM
http://www.businessweek.com/news/2010-07-07/u-s-shopping-center-vacancies-approach-record-high-reis-says.html
U.S. Shopping Center Vacancies Approach Record High
Vacancies at U.S. neighborhood and community shopping centers moved closer to the highest on record in the second quarter amid signs the economic recovery is losing steam and consumer confidence remains subdued, Reis Inc. said.
The vacancy rate at shopping centers rose to 10.9 percent from 10 percent a year earlier and 10.8 percent in the first quarter, the New York-based real estate research firm said in a report today. It was the highest since 1991’s 11 percent. The record for shopping center vacancies since Reis began tracking the data 30 years ago was 11.1 percent in 1990.
“There are really very few reasons to believe that performance deterioration won’t continue for another 18 to 24 months for retail properties, although there are some signs that the pace of decline is moderating,†Victor Calanog, director of research, said in the report.
Out of 80 cities, 11 posted increases in rents paid by tenants. “Compared to the last two quarters, when most if not all of our markets posted declines in effective rents, this is good news,†Calanog said.
The Standard & Poor’s Supercomposite Retailing Index has fallen 23 percent since April 26, when it touched the highest level since July 2007.
Little New Space
“Less than 400,000 square feet of new strip mall space was added in the second quarter, so increases in the national vacancy rate are coming from existing properties bleeding out, not from new properties,†Calanog said.
Effective rents at the shopping centers, or what tenants actually pay rather than landlords’ asking rents, fell 2.8 percent from a year earlier and 0.5 percent from the previous quarter, Reis said.
At regional and super-regional malls, vacancies remained at a 10-year high, rising to 9 percent from 8.4 percent a year earlier and 8.9 percent in the first quarter. Asking rents fell for the seventh straight quarter, the longest streak in the 10 years Reis has compiled the numbers.
Regional malls typically include department stores and fashion and general merchandise retailers and range in size from 400,000 to 800,000 square feet (37,161 to 74,322 square meters), according to the International Council of Shopping Centers. Super-regional malls, including the Mall of America in Minnesota, South Coast Plaza in Southern California and Tysons Corner Center in Virginia, are defined as those larger than 800,000 square feet.
Neighborhood shopping centers tend to be 30,000 to 150,000 square feet and mainly house convenience retailers. Community shopping centers are 100,000 to 350,000 square feet and may include a discount department, home-improvement or grocery store.
U.S. Shopping Center Vacancies Approach Record High
Vacancies at U.S. neighborhood and community shopping centers moved closer to the highest on record in the second quarter amid signs the economic recovery is losing steam and consumer confidence remains subdued, Reis Inc. said.
The vacancy rate at shopping centers rose to 10.9 percent from 10 percent a year earlier and 10.8 percent in the first quarter, the New York-based real estate research firm said in a report today. It was the highest since 1991’s 11 percent. The record for shopping center vacancies since Reis began tracking the data 30 years ago was 11.1 percent in 1990.
“There are really very few reasons to believe that performance deterioration won’t continue for another 18 to 24 months for retail properties, although there are some signs that the pace of decline is moderating,†Victor Calanog, director of research, said in the report.
Out of 80 cities, 11 posted increases in rents paid by tenants. “Compared to the last two quarters, when most if not all of our markets posted declines in effective rents, this is good news,†Calanog said.
The Standard & Poor’s Supercomposite Retailing Index has fallen 23 percent since April 26, when it touched the highest level since July 2007.
Little New Space
“Less than 400,000 square feet of new strip mall space was added in the second quarter, so increases in the national vacancy rate are coming from existing properties bleeding out, not from new properties,†Calanog said.
Effective rents at the shopping centers, or what tenants actually pay rather than landlords’ asking rents, fell 2.8 percent from a year earlier and 0.5 percent from the previous quarter, Reis said.
At regional and super-regional malls, vacancies remained at a 10-year high, rising to 9 percent from 8.4 percent a year earlier and 8.9 percent in the first quarter. Asking rents fell for the seventh straight quarter, the longest streak in the 10 years Reis has compiled the numbers.
Regional malls typically include department stores and fashion and general merchandise retailers and range in size from 400,000 to 800,000 square feet (37,161 to 74,322 square meters), according to the International Council of Shopping Centers. Super-regional malls, including the Mall of America in Minnesota, South Coast Plaza in Southern California and Tysons Corner Center in Virginia, are defined as those larger than 800,000 square feet.
Neighborhood shopping centers tend to be 30,000 to 150,000 square feet and mainly house convenience retailers. Community shopping centers are 100,000 to 350,000 square feet and may include a discount department, home-improvement or grocery store.