Reis: US malls not vacant despite widespread store closures
Even though major retailers have been shutting stores left and right and more businesses have descended into bankruptcy, a new Reis study has shown that malls are not actually empty. Instead, Reis unveiled that the percentage of empty storefronts has barely changed over the last few quarter.
Reis Economist Barbara Burne Denham explained, "Despite dire reports of store closures in major brands across the country, the overall retail real estate statistics recorded very little change in the quarter as the neighborhood and community shopping center vacancy rate held steady at 9.9%, unchanged from year-end 2016 as well as from the first quarter of 2016. The average national asking rent increased 0.3% in the first quarter while effective rents, which net out landlord concessions, increased 0.4%.
In regional malls, vacancy rates were just 7.9% in the first quarter of 2017, just a 0.1% increase from Q1 and Q4 of 2016. Interestingly enough, its several points less than Q3 of 2011, which had a vacancy rate of 9.4%. 2011 was just as much a peak for strip malls, which saw a vacancy rate of 11.1% in Q3 of 2011, compared to a 9.9% vacancy rate in early 2017.
This may come as a surprise to some, as more and more mall-based retailers -- Wet Seal, Rue 21, and BCBG Max Azria to name a few -- are shuttering their doors due to poor foot traffic.
Sears and KMart saw over 150 locations close in the first half of 2017 and Payless ShoeSource is set to shutter 400 stores across the nation over the next few months. Even JC Penney, Banana Republic, and Macy's have been closing store locations in an effort to cut costs.
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