U.S. Mall Vacancies Have Reached the Highest Level Since 2012
In another troubling trend for the beleaguered brick-and-mortar segment, U.S. mall vacancies climbed to 8.6 percent in the second quarter, the highest level since 2012 when the country was just beginning to rebound from the Great Recession. And the bad news doesn’t stop there. In its latest report, real-estate research firm Reis Inc. studied 77 metropolitan areas and found that vacancies are plaguing not only malls, but all types of shopping outlets.
Strip malls and other neighborhood and community shopping centers, in particular, have taken a serious hit, suffering their worst quarter in nine years. Roughly 3.8 million square feet of space was emptied from April to June (compared with 909,000 square feet in the year-ago quarter), driving up the vacancy rate for this type of mall to 10.2 percent. Vacancies in open-air retail centers increased in 55 of the metropolitan areas tracked by Reis.
The firm’s report cited the closure of roughly 800 Toys ‘R” Us store locations nationwide (the chain marked its final day in business on June 29) as a driving force behind the decline in occupancy. “The Toys ‘R’ Us closings impacted the second-quarter statistics more than any other retailer has in any quarter over the last nine years,” Reis said.
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The country’s largest department stores also have been busy shuttering physical stores as more consumers opt to shop online. Bon-Ton, Macy’s, Sears, Kmart and J.C. Penney are among the big-name retailers reducing their store counts. That list is likely to grow even longer, as Reis said it does not anticipate the vacancy rate to improve in the near future.
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