Malls and strip shopping centers have seen an increase in rental rates during the third quarter, however vacancy rates were unaffected as the recovery in retail real estate struggles along.
The asking rentals at regional malls increased by 0.5% during the quarter, to reach $40.51 per square foot. This figure increased by 1.8%, compared to the previous year. The vacancy rate at malls remained at 7.9% for the fourth consecutive quarter.
At strip center, rentals increased 0.4% during the three-month period, to reach $17.06 per square foot. This is an increase of 1.8%, compared to the previous year. The vacancy rates remained the same as the previous quarter at 10.3%. This is a slight improvement from the average rate of 10.74% over the past five-year period.
These figures indicate the struggle being experienced in the retail real estate market. Prices appear to have risen rapidly for high-quality assets, however they remain slow for the more traditional properties located in less than attractive areas.
The vacancy rates increased rapidly in Chicago at 1.4%, Wichita at 1.2% and in Tacoma, Wash. at 1.2%. They declined the fastest in Palm Beach, Fla. at -1.7%, San Jose at -1.2% and Sacramento at -1.1%.
Construction of new centers has also reached a new low. Around 3.99m square feet of new space has been added this year, with 1.3m during the third quarter. The lowest rate previously occurred during 2010, when 4.5m square feet was added during the entire year.
9 OCTOBER 2014, USA