U.S. retail vacancies marginally rise in second quarter: Reis

U.S. retail vacancies rose marginally to 10.2 percent in the second quarter, hurt by bankrupt toy retailer Toys “R” Us Inc’s store closures, real estate research firm Reis Inc REIS. said in a report on Monday.

Toys “R” Us stores across the United States marked their final day in business on Friday.

The store closings impacted the quarter’s statistics “more than any other retailer has in any quarter over the last nine years”, Reis said.

The report said 55 of 77 metros reported a rise in vacancy compared with the second quarter last year, when U.S. retail real estate vacancies were at 10 percent.

“After withstanding the hundreds if not thousands of store closings over the last 18 months, the neighborhood and community shopping center industry suffered its worst quarter in nine years,” the Reis report said.

Net absorption was a negative of 3.8 million square feet, compared with 909,000 square feet in the year-ago quarter.

Reis said it does not expect the vacancy rate to improve in the near future.
The retail statistics somewhat mirror the retail employment numbers, with the sector experiencing positive job growth every month in 2018, and adding 125,100 jobs over the last 12 months, the report said.

The national average asking rents edged 0.2 percent higher, as did the effective rent for the quarter, Reis said.

Only 780,000 square feet of new construction was completed in the quarter, a 79.7 percent drop from a year earlier, according to the report.