US template vacancy rate back of 7 years high, but several closures in front
For months, there has been a steady stream of store closures from Sears, Bon-Ton, J.C. Penney and other retailers. And while the mall and mall seem to be self-sustaining at the moment, it may soon change, with another wave of closures expected in 2019.
The unemployment rate at regional and super regional shopping centers was 9 per cent in the fourth quarter of 2018, based on a survey released on Thursday by real estate research firm Reis of 77 metropolitan areas across the country, down from 9.1[ads1] per cent – a seven year high in the third quarter, but up from 8.3 percent at the end of 2017. There are also over a 10-year average vacancy rate for these malls at 8.4 percent in the fourth quarter.
Overall, US vacancies kept 10.2 percent flat in the course of the year of the last quarter, says Reis.
"According to the many store closures across the US, the small changes in unemployment figures show how retail trade has resisted the structural changes in the industry," says Barbara Denham, senior economist at R demand, so. "Many people believe that unemployment will soar and rents will plummet. This did not happen when the forecasts of the day of judgment proved to be overblown." according to real estate research group CoStar, which tracks the store closures as described. It exceeds 102 million square meters of space in 2017, a record of that time.
After 2019, Denham warns that large and small stores are expected to close several places in the coming months. These announcements tend to come in during the first quarter after the holiday season is finished and companies have a better grasp of where they stand.
However, Reis expects that vacancies will remain stable relative to 2019 as a renter Continue to cross a little, but remain below the inflation rate.
Companies such as Gap, Express and Victoria's Secret Owner L Brands have already suggested at several closures. And Sears's destiny is still largely uncertain, as the bankruptcy store chain could ultimately settle. That means that hundreds of more Sears and Kmart stores go dark, in addition to more than 100 locations, the company is already in the process of circumcision.
The average shopping mall increased 0.2 percent in the fourth quarter after falling 0.3 percent over the past period, Reis said. That means landlords were able to bring in higher paying tenants. Many mall owners have already cited success in replacing Sears with more profitable businesses – and now increasingly apartments, hotels and collaborations. Denham has added that training companies, trampoline parks and grocery stores have also been more active in opening new places late.
The US cities with the highest rents in the last quarter included Orlando, Raleigh-Durham, Austin and Richmond, according to Reis data. Those who had the biggest downfalls included Salt Lake City and Cleveland.
"If the retailer was able to maintain store closures over the past year, it could survive something," Denham said.
