With the news that the vacancy rates and rents across US shopping centers improved for the second quarter in a row, it is believed that this is showing further evidence that the retail sector within America is showing good signs of recovery after a number of years of decline due to the poor economic climate.
While the economy had hit many sectors hard, it was believed that the retail real estate sector was one of the hardest hit. It was at the mercy of reduced property prices as well as reduced consumer spending since the crisis within the housing market began five years ago in 2007.
The first quarter of 2012 was the first time in almost seven years that there has been a drop in vacancy rates within strip malls. This was followed by another drop in the second quarter of the year, with one expert highlighting that the rate declined to 10.8% although demand still remained weak.
Speaking about the news, leading economist Ryan Severino said: “Although we still remain hesitant to claim that the market has reached stabilization, two consecutive quarters of vacancy and rent improvement is the strongest evidence to date that the sector is on the road to recovery.”
It is forecasted that vacancies will continue to fall throughout the remainder of the year, especially if, as predicted, demand for retail space continues to be higher than new construction.
There was also a drop to 8.9% in larger malls, with a corresponding rise in rent rates.
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