[getsmart-l] Retail Property Has Worst Second Quarter in 30 Years

[John O'Gorman]

Does anyone have access to Canadian data?
  ----- Original Message ----- 
  From: 23 Skidoo 
  To: getsmart-l at list.web.net 
  Sent: Wednesday, July 09, 2008 5:38 PM
  Subject: [getsmart-l] Retail Property Has Worst Second Quarter in 30 Years


  Retail Property Has Worst Second Quarter in 30 Years 

  Reuters 
  July 7, 2008 

  U.S. store closings and cutbacks turned the second quarter into the worst 
  for strip mall owners in 30 years, as budget-conscious consumers flocked to 
  low-cost warehouse-style grocery centers, according to a report by real 
  estate research firm Reis. 


  Strip malls, which are usually anchored by grocery or drug stores, saw 
  average vacancies spike 0.5 percentage points to 8.2 percent, a level unseen 
  since 1995, according to the report released on Monday. 


  Vacancies at regional malls rose 0.4 percentage points to 6.3 percent, the 
  highest level since the first quarter of 2002, according to the preliminary 
  results. 


  "They definitely came up weaker than our expectations and we've been pretty 
  bearish on our outlook for retail for some time," Reis Chief Economist Sam 
  Chandan said. "In the market in general there have been a lot of store 
  closings." 


  A growing list of retailers shuttered stores ahead of lease expirations or 
  chose not to renew leases, and as newly completed space hit the market 
  without signed tenants. 


  Starbucks is looking to give up some of the 40 million square feet of retail 
  space it leases. That's in addition to the growing list of retailers, such 
  as Linen 'n Things and Goody's Family Clothing, which filed for bankruptcy 
  protection. 


  Consumers are constrained by increases in food and energy costs, as well as 
  the cost of servicing debt run up during the housing boom. In addition to 
  cutting back on clothing, jewelry and nonessentials, they have turned to 
  lower-price grocers such as Wal-Mart WAL MART STORES For the first time 
  since 1980, more space became available to rent at strip malls than was 
  rented out -- about 3.2 million square feet more. Part of the available 
  space came in the form of 5.7 million square feet of new development that 
  came on the market during the quarter. 


  The extra space translated into falling rents at strip malls, down 0.1 
  percent to an average of $17.60 per square foot. 


  "The downward pressure on rent is coming from landlords being very nervous 
  about the idea of losing a tenant when they know that there's a paucity of 
  replacements for that tenant in the current market environment," Chandan 
  said. 


  Preliminary figures show that regional malls were barely able to raise 
  rents, with just an anemic 0.2 percent rise excluding concessions, its 
  weakest gain since the second quarter. 


  Copyright 2008 Reuters. 


  http://www.cnbc.com/id/25563076 





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