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Report: Retail vacancies hit new highs

October 12, 2009

Retail vacancy rates at U.S. malls and shopping centers have risen to multiyear highs.

According to New York-based real-estate research firm Reis Inc., 10.3 percent of the retail space at U.S. shopping centers--open-air centers typically anchored by a grocery store or big-box retailer--was vacant in the third quarter, reports The Wall Street Journal.

That vacancy rate was up from 8.4 percent in the same period a year earlier and the highest since 1992.

At enclosed malls, the vacancy rate rose to 8.6 percent, the highest since Reis began tracking mall data in 2000.

Retail properties completed in 2009 were those hardest hit, with 30 percent opened half-empty or worse.

The Federal Reserve has tallied nearly 8,300 store closings announced by retailers so far this year, including more than 1,500 large anchor stores, on top of the International Council of Shopping Centers' 2008 tally of 6,900 announced closures.

As demand for retail space dropped, average retail lease rates continued to drop in the third quarter, down 3.7 percent to $16.89 per square foot for shopping centers, and down 3.5 percent to $39.18 for malls.

"We don't see rent levels in retail returning to 2008 levels until 2016," Victor Calanog, Reis director of research, told WSJ.

--Nielsen Business Media
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