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Shopping center lease rates drop 3% compared to last year

Vacancies Up, Dollars Down

4468303818_df3f651599The Wall Street Journal announced today that shopping center vacancies are up (no “news” there) and lease rates are down again, for the sixth straight quarter. Lease rates at shopping centers dropped 3% from a year ago.

Same Old Story

Malls and shopping centers have been hit hard lately, with numerous properties up for sale across the country.

A prominent developer in Oklahoma lost his latest shopping center to foreclosure before the project could even be completed. It sold last month for $720,000 to Oklahoma-based Henderson Lavi LLC. Dollar General had been an anchor store for the complex, but with that firm’s current problems they pulled out of the deal, which escalated the developer’s financial problems.

Pockets of Activity

There are a few retail bright spots out there. Lebanon Valley Mall (near Harrisburg, Pennsylvania) finally found a tenant for a space JC Penney vacated several years ago. HobbyLobby is scheduled to open there in June, and a Subway just leased a former Dairy Queen space in the same mall.

Commercial brokers seem cautiously optimistic on what the rest of 2010 will bring.  With rental rates down 10-30% from their peak a few years ago, there are pockets of the country seeing increased traffic (such as Baltimore) and retailers are out and about exploring their options. However, deals are taking longer to put together as most are still extremely cautious and not as eager to commit quickly, as they may have in the past.

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Written By

Erica Ramus is the Broker/Owner of Ramus Realty Group in Pottsville, PA. She also teaches real estate licensing courses at Penn State Schuylkill and is extremely active in her community, especially the Rotary Club of Pottsville and the Schuylkill Chamber of Commerce. Her background is writing, marketing and publishing, and she is the founder of Schuylkill Living Magazine, the area's regional publication. She lives near Pottsville with her husband and two teenage sons, and an occasional exchange student passing thru who needs a place to stay.

11 Comments

11 Comments

  1. anthonys indianapolis homes for sale

    April 18, 2010 at 2:01 pm

    I think reality may finally be setting in for many commercial landlords. When more tenants are leaving than leasing it’s probably time to lower the rates.

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