by calculated risk 4/09/2024 08:31:00 AM
Note: I mentioned apartments and offices in my newsletter. Moody's: Apartment vacancy rate remained unchanged in the first quarter.Office vacancy rate at record high
Economists at Moody's Analytics said: Apartment and retail ownership patterns, office evolution and stress continue, industry fundamentals flat
Data for the first quarter of 2024 revealed trends similar to those observed in 2023. Retail vacancy rate stable at 10.3%. Asking rents increased 0.2% to $21.69 per square foot, and effective rents also increased 0.2% to $18.98 per square foot. Consumer activity was strong during the holiday season but, as expected, slowed in January as retailers cut spending earlier in the year. However, consumer spending recovered in February, with retail sales increasing by 0.6%. Overall retail sales in 2024 are expected to mirror his 2023 sales, but with a larger share from non-store and online transactions. This quarter, new retail construction also added 198,000 square feet. Despite this growth, the retail sector continues to face familiar financing obstacles due to continued high interest rates, suggesting little change in this trend for the rest of the year. Despite a spate of bankruptcies being announced, vacancy rates have remained stable. Part of this stability is due to the opening of new, smaller stores by entities such as Macy's and Toys R Us, which typically cannot fill this space.
The mid-2000s saw an increase in investment in malls as mall builders followed the „rooftop“ (looser financing) of the housing boom. This caused vacancy rates to rise even before the recession began. Then, vacancy rates rose sharply during the recession and financial crisis.
Vacancy rates have recently remained high and stable as online shopping continues to impact brick-and-mortar stores.