Malls are more of concern than neighborhood centers
Rent and vacancy changes for both multifamily and retail were minimal but still leaned negative, according to REIS in its first quarter report. And while office suffered most, even its vacancy increase of 40 basis points and effective rent decline of 0.8 percent hardly represent a free fall. With this said, one subsector to watch closely is regional and super-regional malls. For these properties, the vacancy rate is now at a record 11.4 percent — a 90-basis-point increase in a single quarter.
Focusing on metropolitan-level outcomes, severe quarterly effective rent declines (greater than 1 percent) were found for just four multifamily markets: San Jose (-2.1 percent), New York (-1.4 percent), suburban Virginia (-1.3 percent) and San Francisco (-1.2 percent). In contrast, in the previous quarter, there were 11 such metros. While declines of this nature are still concerning, the magnitude of the declines for these metros is less than half of the fourth-quarter declines, a wel