Retail Metrics Defy Negative Closure Reports — Kind Of
Reis Inc. released its preliminary retail numbers for Q3 2017. The main news is that, despite the multiple stories concerning continued store closures, net absorption remained positive at 578,000 square feet, with vacancy holding steady at 10% nationwide. Meanwhile, asking rents increased 0.4%. While low, the number remains in positive territory.
Still, all is not rosy for retail; new construction of 1.6 million square feet represented the lowest level of completions since 2014. And, while net absorption was positive, the underlying data shows that absorption was positive in July and August 2017, but turned negative in September 2017.
Furthermore, mall vacancy rates were at 8.3%, an increase from the 7.8% reported in Q3 2016. This vacancy is tied to what Reis dubbed “confirmed closings of JC Penney and Sears stores.” As such, the retail sector is experiencing a “two-steps-forward-one-step-back” pattern of occupancy growth, a trend that is likely to continue, according to Reis analysts.
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