Chicago -- Retail rents fell 1.6% year over year, and inched down 0.5% since the last quarter to the current national average of $14.65, according to Jones Lang LaSalle’s North America Year-end Retail Outlook. National retail vacancy levels posted a 0.1% quarter-over-quarter drop from 7.1% to 7.0%, with open-air centers at the high end with 10.9% vacancy, and general retail at the low end with 4.7% vacancy.
New York and San Francisco continue to be the healthiest markets, with vacancy levels of 2.1% and 3.0%, respectively, the study found. Atlanta and Dallas show the largest vacancies at 10.2% and 9.1%, respectively.
Among the markets tracked, Chicago continues to report the highest absorption, with an impressive 2.0 million sq. ft. in third quarter 2011. Boston and Houston were not far behind with 1.98 and 1.75 million sq. ft, respectively. Only Atlanta showed negative net absorption this quarter with -352,909 sq. ft., though San Francisco's poor absorption continued into this quarter with only 19,942 sq. ft. absorbed due to store closings and relocations.
In other study highlights:
In the distressed market, total retail properties now stand at $28.7 billion, signaling that the sector is now 50% t worked out of its distress pool. Interestingly, distress made up a noticeably lower proportion of total sales this quarter at just 6% but workouts have cut almost $3.5 billion from the distress pool. Restructurings accounted for a significant portion of this, totaling $4.0 billion in the third quarter. New inflows to distress were also much lower this quarter, adding only $1.4 billion. Markets with the heaviest distress