- Posted at 3:49, February 10, 2014
- By Russ Bleemer
A report on CRENews.com says that we should expect a stronger retail market in 2014.
Last year's muted retail property recovery "should pick up steam" this year, according to a study by Reis Inc., New York real estate research firm.
Reis projects retail will benefit from general continued economic improvement and restored consumer confidence, noting that the sector's recovery has lagged others over the past few years.
The report breaks out the retailing comparisons:
- For shopping centers, the national vacancy rate has declined by 30 basis points in each of the past two years, to 10.4% at year-end 2013, but still well above 7.7% in 2008’s first quarter, pre-recession.
- The vacancy rate for malls fell 70 basis points to 7.9% in 2013, but is still 150 points above the 2008 first quarter level.
- The average asking rent for shopping centers increased by 140 basis points in 2013, to $19.34 per square foot, a drop of 100 basis points from 2008’s first quarter. The mall average last year was up 160 basis points to $39.95 a square foot—but still 140 basis points below 2008's first quarter.
Ryan Severino, Reis's chief economist, says in the article that the performance “reflects the pace of improvement in the economy and labor markets.” But he adds that the issues behind October’s government shutdown are at least temporarily resolved, and consumer confidence is up, providing a positive outlook for retailers in the new year.
Severino says that retail gains will follow the national economy’s improvement, with the greatest gains coming at the high-end retailers—“those that cater to affluent consumers,” the article says.
The report contrasts two affluent markets, San Francisco and Fairfield County, Conn., which had the nation's lowest shopping center vacancy rates in 2013’s fourth quarter at 3.4% and 3.9%, respectively, with the some of the nation's highest vacancy rates, often in traditionally manufacturing based markets. The highest shopping center vacancies were in Tulsa, Okla., at 16.8%; Dayton, Ohio, with a 16.2% shopping center vacancy rate, and Columbus, Ohio, at 15.9%.