May 2019
Real-estate data firm REIS recently released its first-quarter 2019 retail report. A few highlights:
- The national retail vacancy rate for neighborhood and community shopping centers was unchanged, at 10.2% in the first quarter.
- The national average asking rent, and the effective rent (which nets out landlord concessions), increased 0.4% in the first quarter. At $21.30 per square foot (asking) and $18.65 (effective), the average rents both increased 1.6% year over year.
- The regional mall vacancy rate increased 0.3% in the first quarter, to 9.3%, as more than two dozen Sear’s stores closed. The average rent, however, was flat in the quarter.
- For neighborhood and community shopping centers, net absorption was 949,000 square feet, lower than the previous quarter’s absorption of 1.48 million, but in line with absorption in the first quarter of 2018. New completions measured 832,000 square feet, lower than the 2.25 million completed in the fourth quarter. Current construction underway is expected to add close to 8 million square feet to the inventory this year, in line with that of 2018.
- Some good news: Retail stores continue to open. More than 16 million square feet of leases were signed in the last five quarters. Grocery stores were the leading new occupant, followed by home/houseware stores, gyms/fitness, discount variety stores and discount clothing stores. Trampoline parks were also in the top 10. Still, other stores are expected to close this year, including JC Penney, Payless, Charlotte Russe, and Gymboree.
