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The increase in the number of vacancies in US shopping centers results in lower rents, which shows that many trade centers continue to struggle despite the country's strong economic growth and consumer confidence.
Average shopping center rent in the third quarter fell 0.3% to $ 43.25 per square foot in the third quarter, compared to $ 43.36 in the second quarter, according to the company's data. Reis Inc. Real Estate Research Inc. Quarterly was in 2011.
Vacancy rates for shopping centers also continued to climb from 8.6% in the third quarter to 9.1% in the third quarter. That's the highest vacancy rate since the third quarter of 2011, when it had reached 9.4%, according to Reis.
"The retail sector continues to correct itself," said Barbara Denham, Senior Economist at Reis.
This weak point contrasts with most of the rest of the US economy, where strong job growth and strong economic prospects have strengthened consumer and business sentiment. Consumer confidence hit a 18-year high last month, the Dow Jones Industrial Average set another record Tuesday and a new trade deal with Canada and Mexico has boosted the business climate.
Some retailers such as Target Corp. and
Nike
Inc.
benefited from growing consumer confidence this year and posted strong earnings growth. The price of their shares has risen by almost a third since the beginning of the year.
But many low-end shopping centers have struggled to capitalize on the broader recovery, particularly in some of the most economically depressed areas of Pennsylvania, Ohio, and Michigan, which are suffering from a glut. shopping centers.
Closures of department stores from
Stores Bon-Ton
Inc.
and
Sears Holdings
Corp.
Mr. Reis explained that the third quarter had been at the origin of a significant rise in the vacancy rate, although a number of Sears stores occupied by their owners were excluded numbers because they do not have leases.
"Any shopping mall worried about a Sears store or
Macy's
closure has bigger problems, "said Alexander Goldfarb, Senior Analyst at Sandler O'Neill + Partners LP.
Not all shopping centers are under pressure. Shopping centers located in wealthier neighborhoods with less competition are still attracting wealthy buyers and continue to attract tenants. Better-located and upscale shopping malls add "new uses, such as restaurants and theaters," said Mr. Goldfarb, who attract customers.
Retailers are also looking at their physical footprint and investing more in developing their online presence to meet the needs of more buyers using different channels. In the second quarter, online sales accounted for 9.6% of total retail sales, after adjusting for seasonal variations, compared with 9.5% in the previous quarter, according to data from the US Census Bureau.
Write to Esther Fung at [email protected]
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