As retail sales fall, store vacancies rise
You might not have to wait for a good parking spot at the mall these days. Despite hopeful projections, retail sales fell 1.1 percent in March. Commercial and investment specialist Hansen Matthews said, “Retail sectors that have been hit the hardest recently are electronics, home furnishings, and your heavy retailers.”
With consumers spending less, many retailers are having trouble just paying the rent. Last year, mall tenants vacated 8.6 million square feet of commercial property. This year, vacancies have already surpassed that. In just 4 months, retailers have moved out of 8.7 million square feet.
“Folks that still have money to spend are spending it only on items that are essential,” explains mortgage banker Jim Felds.
In New Hanover County alone there are more than 100 open retail spaces and some retail centers say they are making 50 percent less than last year. For the consumer, all the closings mean fewer choices and less comparison shopping, but that does not mean you will be paying more if you do your homework.
“An informed consumer can still find great deals no matter what they’re shopping for, whether it’s banking or retail or haircuts, whatever the case might be,” added Felds.
With consumers spending less, and more “For Lease” signs popping up at strip malls throughout the country, experts say lending needs to loosen up before commercial property starts to fill up. “They couldn’t get loans for their businesses or their real estate, you can’t sustain a business,” said Felds.
Even if retail spending continues to slow down, experts say it could never come to a complete stop. “Stuff in your closet, your garage, it’s going to break or it’s going to wear out, people cannot stay out of stores forever,” added Matthews.
Felds said all the empty stores mean better prices if you are looking to rent a space. Some developers are offering free rent for longer leases.
One industry that seems to be escaping the decline in spending is grocery stores.
Story summary image
More: continued here