October 25, 2016
In partnership with ULI and Allen Matkins, Connect Media brings you the “Number of the Week” every Wednesday.
2.5%: The average vacany rate in higher-quality retail centers
The vacancy rate for higher-quality retail centers was just 2.5% in the third quarter of 2016, according to real estate management firm Heitman.
“Occupancies at ‘A’-quality centers are at or near all-time highs, and market rents in such centers are increasing despite lackluster retail sales growth. A historic lack of new supply growth remains a key driver of retail fundamentals,” said Andrew McCulloch, managing director of real estate analytics for Green Street Advisors.
“Additionally, the healthiest retailers continue to seek out strong locations to establish brand recognition and awareness and are therefore migrating to the better centers. Because of their omni-channel strategies, retailers at ‘A’ centers are increasingly willing to pay rents not necessarily justified by sales out of the physical location.”