Mall Vacancies Hit 6-Year High

The U.S. mall vacancy rate has reached a six-year high in the first quarter. Following an increasing trend, the vacancy rate hit 8.4 percent in Q1, according to the Wall Street Journal – a 0.1 percent increase from Q4 of 2017 – representing the highest vacancy level since 2012.

To compile the data, real estate research firm Reis Inc. (New York) studied 77 metro areas. The study revealed that shifting consumer shopping habits, namely online shopping, continue to negatively impact brick-and-mortar stores and shopping malls. The data also reveals the impact of the increasing closure of department stores, which have long been considered anchors for shopping centers.

Despite the higher vacancy rate in Q1 2018, retailers occupied 453,000 more square feet than in Q4 2017, though absorption was the lowest it’s been in five years.

“The first quarter tends to see the lowest activity. However, this was an unusually slow quarter for retail leasing and construction,” the Reis report said.