Reis Inc. report indicates US retail mall vacancies are slightly up in Q2

By

Rebecca Taras

Published
Jun 29, 2017

According to a report by real estate firm Reis Inc., U.S. retail mail vacancies increased by 0.2 percent (now currently 8.1 percent) in Q2 while the cost of rent made a marginal increase—0.4 percent or $20.64 per square foot.

When looking at the national vacancy rate, there was a slight .1 increase (9.9 to 10 percent) from the first quarter, which Reis connects to new construction. The report indicates that the slight increase in vacancy this quarter is due to Macy’s store closings. When looking at available retail space in the market, the report shows that the net absorption dropped to 421,000 square feet from 2 million in Q1—the lowest it has been since 2011.

Considering recent news surrounding malls has been gloom and doom, even these slight increases are promising—and not all retailers and owners are throwing in the towel. Case in point, it was recently reported that mall owner GGP believes that malls do in fact have a future in the retail market, based on the idea that shoppers like to see and touch a product— which is obviously not an option where e-commerce is concerned. Add in the fact that many companies still don’t offer free shipping and customers are looking at a cost increase that could be avoided with a mall purchase.

"At the end of the day, the retailer may evolve, but the real estate stays," said Sandeep Mathrani, chief executive of GGP.