Vacancy, Leasing and Retail Sales Trends Show Outlet Centers are a Force to be Reckoned with in Retail Real Estate
While most of the nation's shopping centers and malls struggle to hold onto tenants and deal with increasing vacancy during this recession, landlords and leasing agents for the country's outlet center have enjoyed continually tight vacancy rates during this time, and many have also seen improvement over the last six months.
According to CoStar Property Analytics, outlet center vacancy hit a high of 5.56% at the end of first quarter 2009. Since then, the shopping center category is the only one to put togethr two consecutive quarters of declining vacancy this year. Currently, the outlet center vacancy rate stands at 5.12%, far outshining the 8% - 10% average vacancy rates currently found in the lifestyle, power, community and neighborhood shopping centers categories (click to see chart at end of article).
According to a CoStar Property Analytics statistical forecast, outlet center vacancy could return to its lower, pre-recession level of less than 4% by the end of second quarter 2010.
One major contributing factor to this low vacancy is the level of positive net absorption within this category. Outlet center net absorption amounted to 1.1% of the category's total square footage so far this year, which is a much higher level than other shopping center types -- power centers have absorbed .8%, followed by lifestyle centers (.6%), neighborhood centers (-.1%), community centers (-.2%), and malls (-.3%).
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By Sasha M Pardy
September 30, 2009
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