| April 2
April 2 U.S. strip mall vacancies were unchanged
in the first quarter of 2014 at 10.4 percent from the fourth
quarter of 2013, according to real estate research firm Reis
The national vacancy rate remains 70 basis points lower from
the historical peak of 11.1 percent during the third quarter of
2011. Though the economy continues to experience mild
improvement, many strip malls still have too many empty spaces.
Construction during the first quarter was the lowest since
the first quarter of 2011. Net absorption, the change between
space leased and space vacated, was the lowest since the second
quarter of 2011. The rough winter undoubtedly had an impact,
prolonging projects. Because of that, Reis noted in its report
"the data from this quarter is more of an aberration than a
reversal of the upward trend of the last couple of years."
Asking and effective rents both grew by 0.4 percent in the
first quarter but rent growth remains slightly below what it was
in mid-2007, before the onset of the recession. However,
year-over-year rent is moving upward with both asking and
effective rents growing by 1.5 percent and 1.6 percent,
respectively. This is a small improvement over last quarter when
asking and effective rents both grew by 1.4 percent on a
year-over-year basis, yet more evidence of an overall recovery.
High-income, affluent markets are outperforming
lower-income, less affluent ones.
A constant worry for strip mall operators is e-commerce,
said Ryan Severino, Reis's senior economist and associate
director of research. "There's more competition online than
ever," Severino said. What makes it so difficult, he added, is
that no one knows how much business online retailers will siphon
"It's a Pandora's box."
(Reporting By Michelle Conlin; Editing by Diane Craft)