Jan 9 Vacancies declined and rents rose in the
fourth quarter at large regional U.S. malls, which continued to
fare better than smaller strip centers burdened by a weak
economy and an oversupply of space, real estate research firm
Reis Inc said.
After modest improvement in vacancies and rents in 2012, the
research firm expects the trend to continue in 2013, said Reis
senior economist Ryan Severino.
"Until the economy and the labor market start to pick up
more, there's not a strong catalyst to generate demand for more
Employers added a modest 155,000 jobs in December and the
unemployment rate held steady at 7.8 percent, the government
said on Friday.
In the fourth quarter, vacancies at U.S. regional malls
declined for the fifth consecutive quarter to 8.6 percent from
8.7 percent in the third quarter. Asking rents grew by 0.2
percent in the fourth quarter from the third quarter.
Within the sector, class A malls with luxury retailers
catering to affluent customers continued to boast lower
vacancies and command higher rents than malls with more
mainstream tenants, Severino said.
"What's happening is the class A malls are raising the
performance of the entire sector," he said.
Vacancies in strip malls declined to 10.7 percent from 10.8
percent in the third quarter. The slight decrease was an
improvement from the third quarter when the vacancy rate was
flat from the previous quarter.
Still, three-plus years after the recession, the vacancy
rate for strip malls is barely below the all-time high of 11.1
percent set in 1990 and the third quarter of 2011, according to
Asking rents for strip malls increased 0.2 percent from the
third quarter. It was the fifth straight quarter that rents
increased, according to Reis.