In what can be seen as a good sign, strip-mall vacancy has fallen for the first time in seven years, according to a report by Reis Inc (h/t Reuters).
Despite the positive news, Reis states that it is too early to claim that this is a rebound. As you may know, this area of real estate was battered by the housing crisis and the subsequent recession.
Senior economist for Reis, Ryan Severino spoke on the topic (via Calculated Risk):
Vacancies finally began to fall during the first quarter, declining by 10 bps. This is the first quarterly decline in the vacancy rate since the second quarter of 2005. In the periods leading up to the recession, excess building was to blame for the increase in vacancies. Since the advent of the recession, supply growth has been virtually nonexistent, but anemic demand drove vacancies upward.
Severino then goes on to warn that this does not indicate that a recovery for shopping centres is underway. There are still many issues surrounding strip-malls, one mainly being that new completions are still near historically low levels. Regardless, this is at least some positive news in what has been an extremely negatively affected aspect of real estate over the past number of years.
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