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Vacancies Continue to Rise

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Vacancies at U.S. neighborhood and community shopping centers rose in the second quarter to a 13- year high, while vacancies at larger, regional malls were at their highest level since 2002, research firm Reis Inc. said.

The average vacancy rate at neighborhood and community malls rose to 8.2 percent, up from 7.3 percent a year earlier and the highest level since 1995, the New York-based real-estate researcher said. At regional and super-regional malls, vacancies increased to 6.3 percent, up from 5.6 percent a year earlier and the highest since the first quarter of 2002, Reis said.

Retail sales and demand for shopping-center space are being hurt by rising unemployment, increasing food and gasoline costs, and declining home values. U.S. employers cut jobs in June for a sixth straight month, and the jobless rate remained at 5.5 percent after jumping in May by the most in two decades, the Labor Department said last week.

The amount of retail space being abandoned, ``consistent with store closures, is at its highest level in almost 28 years,'' or as long as Reis has been collecting data, Sam Chandan, the firm's chief economist, said in an e-mail message.

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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