BETHESDA, Md. — With strip-mall anchor stores such as Linens ’n Things and Circuit City filing for bankruptcy and other companies closing some locations to cut costs, U.S. retail vacancy rates rose to 6.6% in the third quarter from 6.1% a year earlier, according to CoStar Group, a provider of commercial real estate information.
Shopping centers including strip malls are reporting vacancy rates of 9.4%. Larger, enclosed malls are doing better, with vacancy rates of about 3.9%.
The store closings have come as the U.S. economic climate continues to decline, and the trend is expected to accelerate as the financial crisis tightens credit, according to retail analysts and restructuring experts.
This is bad news for drycleaners and other established tenants who rely on foot traffic drawn in by the anchor stores.
“When you have [big anchor stores] go out in the same center, that does not portend well for the remaining retailers that depend on the larger players to attract the footprints to the other stores,” Nina Kampler, executive vice president for Hilco Real Estate, told Reuters’ Chelsea Emery. “It really forebodes very poorly, and I think strip centers are extremely at risk.”
Approximately 148,000 retail stores of all kinds are expected to close this year, according to the International Council of Shopping Centers. This is the largest number since 2001, representing at least 625,000 retail jobs.