Vacancy rate at U.S. strip malls and shopping centers continued their steep rise in the second quarter, as anemic sales forced retailers to close stores. Malls are losing stores at the fastest pace in 17-years, according to leading real estate research firm Reis Inc.
During the second quarter, the vacancy rate at U.S. strip malls reached 10 percent, the highest level since 1992, the report said.[A]asking rent fell 1.7 percent from a year ago to $19.28 per square foot. Asking rent fell 0.7 percent from the prior quarter. It was the largest single-quarter decline since Reis began tracking quarterly figures in 1999.
Factoring in months of free rent and other concessions….rent declined 3.2 percent year-over-year to $17.01 per square foot. Effective rent fell 1.1 percent from the prior quarter.
About 7.9 million square feet of space was returned to the market during the quarter.
The picture was no prettier for U.S. regional malls, whose vacancy rate rose to 8.4 percent, the highest vacancy level since Reis began tracking regional malls in 2000.
Asking rents for regional malls continued to deteriorate but at a faster rate, falling 1.4 percent in the second quarter, compared with 1.2 percent in the first….”Right now it looks like all signs are pointing to rents and vacancies, big components of income, getting shot down,” Calanog said. “Until we see stabilization and recovery take root in both consumer spending and business spending and hiring, we do not foresee a recovery in the retail sector until late 2012 at the earliest.”