Thursday, October 07, 2010

Reis: Mall vacancy rate declines slightly in Q3

by Bill McBride on 10/07/2010 02:13:00 AM

Strip Mall Vacancy Rate Click on graph for larger image in new window.

From Reuters: U.S. mall vacancy rate dips for first time in 3 years

The national vacancy rate for large regional malls fell to 8.8 percent in the third quarter from 9.0 percent in the second ... Asking rents were unchanged at $38.72 per square foot after declining for seven straight quarters ... At the strip malls ... vacancy was 10.9 percent.

"While retail properties were offered a reprieve from massive deterioration, it is too early to say that the market has bottomed," said Victor Calanog, Reis director of research.

Many retailers have long-term leases that expire soon. The weak U.S. economy may prompt retail tenants not to renew, pushing up vacancy again, he said.
At regional malls, the record vacancy rate was 9.0% in Q2 2010 (Reis started tracking regional malls in 2000). The record vacancy rate for strip malls was in 1990 at 11.1%.