CNBC – US mall vacancy rate backs off 7-year high but more closures from Sears & others on the way

Reis in the News

By Lauren Thomas
Source: CNBC – US mall vacancy rate backs off 7-year high, but more closures from Sears, others on the way

For months, there’s been a steady stream of store closure announcements from Sears, Bon-Ton, J.C. Penney and other retailers. And while mall and shopping center owners appear to be holding their own at the moment, that could soon change, with another wave of closures expected in 2019.

The vacancy rate at regional and super regional malls was 9 percent in the fourth quarter of 2018, based on a survey released Thursday by real estate research firm Reis of 77 metropolitan areas across the country. That’s down from 9.1 percent — a seven-year high — in the third quarter, but up from 8.3 percent at the end of 2017. That’s also above a 10-year average vacancy rate for these malls of 8.4 percent during the fourth quarter.

Overall, U.S. retail vacancies remained flat at 10.2 percent during the latest quarter, Reis said.

“Given the many store closures across the U.S., the minimal changes in vacancy rates show how the retail sector has withstood the structural changes in the industry,” Barbara Denham, a senior economist at Reis, said. “Many feared that vacancy rates would soar and rents would plummet. This did not occur as the doomsday prognostications proved to be overblown.”

 

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