Mall vacancy increases in Q2 2017
The vacancy rate for U.S. regional malls was 8.1 percent in second quarter 2017, up from 7.9 percent in first quarter, according to Reis. The vacancy rate was up from 7.9 percent in second quarter 2016. The current rate, however, is still lower than the cycle peak of 9.4 percent in third quarter 2011.
For neighborhood and community centers, the vacancy rate was 10 percent in second quarter, up from 9.9 percent in first quarter, and up from 9.8 percent in second quarter 2016. For strip malls, the vacancy rate peaked at 11.1 percent in third quarter 2011.
Additionally, the national retail vacancy rate increased 0.1 percent in the second quarter to 10.0 percent, according to Barbara Byrne Denham, Reis economist. Asking rents increased 0.4 percent to $20.64 in the second quarter and effective rents also increased 0.4 percent as well.
The retail real estate market also posted positive net absorption in second quarter 2017. The vacancy rate increased a bit due to new construction that was only partially absorbed by new leasing. Still, the vacancy rate increase from 9.9 percent to 10 percent was smaller than most expected.
Reis said the increase in the mall vacancy rate was due to recent confirmed closings of Macy’s stores. Additional malls closings include the Valley View Mall in Dallas, which just broke ground on a $4 billion mixed-use redevelopment project, and the Atrium Mall in Boston, which was recently transformed into a wellness and medical facility.