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Wednesday, January 23, 2013

Retail Centers See Modest Growth

U.S. malls and strip centers saw slight growth in the fourth quarter, but experts say the wobbly economy and recent disappointing holiday-shopping season point to a lackluster 2013 for retail landlords.
The average vacancy rate at malls in the quarter declined to 8.6%, down one-10th of a percentage point from the previous quarter, according to a new report from real-estate research firm Reis Inc. REIS +0.81% Mall vacancy has declined five quarters in a row since the industry hit a 12-year high of 9.4% in the third quarter of 2011, said Reis, which tracks the top 77 U.S. markets.

Weingarten Realty Investors
Rendering of a Petsmart store to be opened this year at the Six Forks Station center in Raleigh, N.C.
At strip centers, the rows of shops facing a common parking lot and often anchored by a grocery store, average vacancy declined to 10.7% in the fourth quarter from 10.8% in the third. That is just 0.4 percentage point from the highest vacancy rate in this category since Reis began tracking the figures: 11.1%, registered in the third quarter of 2011 and at year-end in 1990.

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Monday, January 14, 2013

Health Clinics Set Up Shop in Former Stores

HealthEast Care System’s Grand Avenue clinic in St. Paul looks a lot more like the retail establishments that surround it than the typical institutional clinic once common in the medical industry.

Bathed in earth-tone colors and soft lighting, the waiting room offers patients comfortable seating, walls filled with art and decorative glass dividers. After a visit, patients can enjoy walking around one of St. Paul’s premiere retail neighborhoods.

The clinic, near the southwest corner of Grand and Victoria Street, is part of a trend to offer more attractive clinics and to place them in high-profile shopping areas. The clinic “offers better visibility for us — we’re much more a part of the community than at our former clinic,” said Len Kaiser, director of network development at HealthEast.

“We are trying to be more like retail with all the services we provide and the Grand Avenue location, in particular, has been extremely successful and serves as a model for our new clinics,” Kaiser said.

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Monday, January 7, 2013

The Death of the American Shopping Mall

The Death of the American Shopping Mall

    The Death of the American Shopping Mall
Mark Blinch/Reuters

America has too many malls.
I’ve recently blogged that many traditional brick-and-mortar retailers are being threatened with "economic destruction" by their advantaged online competition. In an interview with Bloomberg TV, anchorwoman Nicole Lapin asked about the implications of this dynamic on retail real estate. I said I hadn’t studied it, but I thought the ramifications would be very big and very negative (I believe the phrase "apocalyptic" was used).
I’ve since had the opportunity to spend some time looking at this issue, and I believe we’re seeing clear signs that the e-commerce revolution is seriously impacting commercial real estate. Online retailers are relentlessly gaining share in many retail categories, and offline players are fighting for progressively smaller pieces of the retail pie. A number of physical retailers have already succumbed to online competition including Circuit City, Borders, CompUSA, Tower Records and Blockbuster, and many others are showing signs of serious economic distress. These mall and shopping center stalwarts are closing stores by the thousands, and there are few large physical chains opening stores to take their place. Yet the quantity of commercial real estate targeting retail continues to grow, albeit slowly. Rapidly declining demand for real estate amid growing supply is a recipe for financial disaster.

View the full article here.