Finding the Balance
- The vacancy rate increased from 7.2 to 8.2 percent during the first two quarters of 2017 as a wave of store closings hit the region. All center types except for Neighborhood Centers had vacancy increases.
- Most new construction is in mixed-use residential and retail developments.
- Asking rents were stable, but tenant improvement allowances were increasing.
- Investment sales activity was highlighted by a record-high sale price for a suburban center.
The first six months of 2017 reflected the challenges facing retailers and landlords. Multiple bankruptcies, restructurings and streamlining resulted in over 2.1 million square feet of vacancy, and this was just from the Macy’s, Sears Kmart, JC Penney, hhgregg and Sam’s Club stores. Radio Shack, Payless and Rue21 were a few of the growing number of retailers filing for bankruptcy and closing a combined 35-plus stores in the region.
Finding the right mix of online versus bricks and mortar locations, and creating an environment and experience that brings shoppers into the stores will be an ongoing battle for retailers.