An Evolving Retail Mix
- The vacancy rate decreased from 7.6 percent at mid-year to 7.2 percent at year end.
- Numerous large vacancies were backfilled — an encouraging sign since additional large retailer vacancies are upcoming in 2017.
- Asking rents continued to increase for upper-tier and renovated centers, but remained flat for older centers.
- Investment sales activity was behind the first half of 2016 in terms of square footage, but ahead in dollar volume.
Despite challenges facing brick and mortar retail, regional shopping center vacancy continued to trend downward during the last two quarters of 2016. New and expanding grocery chains, off-price apparel, home furnishing stores, and fitness chains took down multiple vacant anchor spaces. The retail mix within centers has been evolving to include a greater mix of service, medical, fitness, and entertainment tenants. Supermarkets are increasingly adding in-store dining options to attract customers. This is particularly noticeable in Pennsylvania due to relaxed beer and wine sale restrictions and the auction of expired liquor licenses to supermarkets.