Vacancies at regional malls rise as economy reels

NEW YORK (Reuters) - Vacancies at regional malls in the United States rose in the fourth quarter to their highest levels of the decade, according to data released on Wednesday by real estate research firm Reis Inc.

Vacancies at those malls rose to 7.1 percent from 6.6 percent in the fourth quarter, the highest level since Reis began tracking regional malls in 2000.

That rise in vacancies was accompanied by a fall of 0.3 percent in the asking rent.

"The beleaguered retail sector is suffering given the steep decline in two important and related drivers of performance," Reis Director of Research Victor Calanog said in a statement, in reference to negative job growth and the plunge in retail spending.

Reis projects that vacancies will continue to rise at regional malls through 2010, barring a dramatic improvement in the economy.

Vacancies also jumped at neighborhood and community centers, rising half a percentage point to 8.9 percent in the fourth quarter, the single largest jump on record.

There was also negative net absorption of 4.1 million square feet at these centers in the fourth quarter, according to Reis.

Calanog said vacancies will keep rising unless consumer confidence recovers, the housing market stabilizes and the credit markets ease.

"And even when they stabilize, we often observe anywhere from a 12 to 24 month lag until commercial retail properties begin benefiting from a resumption in consumer and retail spending," he said.

The slump is not confined to regional malls and neighborhood and community centers. Reis data on Tuesday showed office rents across the United States fell 1.2 percent in the fourth quarter, and while data released on Wednesday showed rents at U.S. residential apartments fell 0.4 percent during that period.

(Reporting by Phil Wahba)