Source: The Wall Street Journal
The faltering economy took a heavy toll on malls and shopping centers in the second quarter, but it didn’t hurt the rental-apartment market as much as expected reports The Wall Street Journal. Vacancies at retail properties rose to multiyear highs in the second quarter as retailers closed stores and curtailed expansion plans. Meanwhile, apartment-complex vacancies remained unchanged and rents rose by a stronger-than-expected 1.1% in the quarter, according to real-estate research firm Reis Inc. in New York.
The higher retail vacancy rate stems from the slowdown in consumer spending and the weak housing market, among other economic pressures. Vacancies at enclosed malls in 76 major U.S. markets rose from 5.9% in the first quarter to 6.3% in the second quarter, the highest level since early 2002, according to Reis.
Faring worse were open-air retail venues such as big-box centers and grocery-anchored strip centers. Vacancy in those formats climbed from 7.7% to 8.2% in the second quarter, the highest tally since 1995. Open-air centers tend to lose more tenants in a bad economy because they cater more to local, mom-and-pop shops. Malls, on the other hand, house more national retailers that tend to be more stable financially.
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