Vacancies Up, Dollars Down
The 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.