As the spending slump forces retailers to trim store portfolios, strip malls, community centers and regional markets are all shedding stores at a record pace, according to a report from real estate research firm Reis.
During first quarter 2009, retail tenants at these centers have vacated 8.7 million sq. ft. of commercial space, bumping up the vacancy rate at malls to 9.5%, according to the study.
This statistic overshadows the 8.9% vacancy rate reported for all of 2008, the study reported, and is also the largest single-quarter jump in vacancies since Reis began publishing quarterly figures in 1999.
"These record numbers are symptomatic of the pervasive weakness that we're seeing across economic sectors," said Victor Calanog, director of research with Reis. "Their home values and retirement accounts are still reeling, and consumers remain concerned about future income as job losses accelerate."
Eager to retain tenants, mall operators and landlords have reduced rents by about 1.8% on average in the first quarter, the biggest quarterly drop in rents since 1999. This effort is doing little to entice struggling retailers, Calanog said, adding he expects mall vacancies to exceed historical levels through 2011 before they stabilize sometime in the middle of 2012.