Inching Along: Minor Improvement for Retail in the Third Quarter

  

 ATLANTA, GA – Going into the fourth quarter, the recovering retail market can be described by one word: tepid. Fundamentals are slowing improving, but no drastic changes in vacancy or rent occurred during the third quarter.

Michael Bull

Those were a few of the points made during the most recent episode of the “Commercial Real Estate Show” radio program, hosted by Michael Bull of Bull Realty. Bull and his guests discussed vacancy, tenants and the investment market.

 The total retail vacancy rate for the United States is currently 9.3 percent, said Jesse Tron, communications manager at the International Council of Shopping Centers (ICSC). “Community and neighborhood shopping centers are experiencing the highest vacancy rates,” he said.

Ron Wheeler

The national vacancy rates for community centers and neighborhood centers are 11.3 percent and 9.4 percent, respectively, Tron said. Comparatively, the vacancy rate for power centers is only 5.7 percent. “Retail has rebounded quite nicely from the recession, when total vacancy peaked at 11 percent,” he added.

 Discount retailers, medical users and fast-casual restaurants are the most active tenants when it comes to looking for retail space, said Ron Wheeler, CEO of Sembler. “We have probably leased more dollar stores during the past few years than in the history of our company,” he said.

Jack Halpern

As vacancy continues to decline, tenants are getting more creative with and flexible about the location and configuration of their space, said Jack Halpern, chairman of Halpern Enterprises. “For tenants that are interested in infill space, those locations often require a different format than what they are used to in the past,” he added.

 Though retail is experiencing slow and steady improvement, investors are still only looking at high-quality retail properties, guests said. “Generally speaking, it’s not a favored property type at the moment,” said Ryan Severino, senior economist at Reis. “Volumes have been lower than office and apartments because of the slow recovery in vacancy and rent.”

Ryan Severino

The entire episode on the U.S. retail market is available for download at www.CREshow.com. The next “Commercial Real Estate Show” will be available on Oct. 31 and will examine the multifamily market.

 For a complete copy of the company’s news release, please contact:

Stephen Ursery

The Wilbert Group

404.405.2354

sursery@thewilbertgroup.com