Archive for the ‘Strip Centers’ Category

The last quarter of 2012 saw a continued snail’s pace towards the recovery of the retail shopping center industry. According to the National Real Estate Investor, improvements in fundamentals were minimal at best, on par with quarterly results exhibited since the retail space market bottomed. These results were expected, however, as demand remains severely depressed despite little new construction. This has caused only incremental improvements in occupancy and rents.

The outlook for the future remains bleak as the economy and job market are not expected to perform much better than they did in 2012. Another reason for pessimism is the effect that the increased payroll tax will have on consumers. While spending up-ticked 0.1% month-over-month in January, much of that was to do with year-end bonuses and a surge in dividends. That figure will likely be a negative percentage in February both month-over-month and year-over-year.

To read the full article from the National Real Estate Investor, click here.

Grocery chains are beginning to claim the shopping centers they anchor to avoid inherited risks that come with the uncertainty of a new owner. According to Retail Traffic, the biggest grocery chains in the U.S. have invested nearly $450 million in grocery-anchored center purchases during the past 24 months. As many have the first right of refusal when a property is for sale, this leads to many chains desire to control their own destiny and take advantage of the opportunity to buy the whole center.

It has been proven that many chains are not only able to save money by owning the shopping centers they anchor, but also end up with quality property investments. It also has added benefits of a quality and perception control factor as even though the majority of grocery chains don’t own the centers they anchor, public perception often times is that they do. This will keep from outside owners from making the grocery chain look bad with vacancy and bad leases.

To read the full article from Retail Traffic, click here.

With very little development in the second quarter of 2012, U.S. shopping centers saw rent and occupancy rise over that time frame. According to Bloomberg, occupied space rose by a net 2.06 million square feet, the third largest addition since the slump for neighborhood and community shopping centers began in the first quarter of 2008. The absorption of space compares to a loss of 39,000 square feet over the same time period in 2011.

Going hand-in-hand with the positive absorption, vacancies in shopping centers dropped 0.1% to 10.8% in the second quarter. As there continues to be a low level of shopping center development, only 572,000 square feet in the second quarter, vacancies are gradually falling from their 12-year high achieved in the fourth quarter of 2012. Additionally, effective rents also improved, averaging $16.55 per square foot, up $0.06 from the same time last year.

To read the full article from Bloomberg, click here.

Lifestyle centers exploded in the mid-2000s, but experienced hard times during the recession due to the fact that many were built in developing areas with no anchor tenants. According to Retail Traffic, lifestyle centers are following in the footsteps of other retail formats and making a comeback as better positioned properties are drawing interest from investors. In general, retail is doing better and sales are increasing at several projects that struggled during the recession.

With lifestyle center activity increasing already, more is expected in the coming months with many of the properties more than likely changing their focus to fill vacancies with neighborhood daily needs and service and quasi-office tenants. However, even though there is more interest in the market, the trend still remains that the quality of the property will drive its success. The better quality the center, the more demand there is.

To read the full article from Retail Traffic, click here.