New York City — Despite a rash of bankruptcies and store closures by major retailers during the first quarter of 2017, the U.S. retail market overall is quite healthy, according to a report by Reis, a New York-based commercial real estate analytics firm.
To gather its data, Reis tracked multi-tenant neighborhood and community shopping centers of 10,000 square feet or larger in 77 primary metro areas throughout the United States.
Last week, Payless ShoeSource became the 10th retailer to file for Chapter 11 bankruptcy so far this year, according to CNBC. Others include Gander Mountain, BCBG Max Azria, Wet Seal, Limited Stores, Gordmans Stores, hhgregg, Eastern Outfitters, RadioShack, General Wireless Operations and Michigan Sporting Goods Distributors.
Aeropostale also closed nearly 600 locations in 2017, while Sports Authority gave back 460 storefronts after its liquidation. Macy’s, JC Penney and Sears are undertaking additional store closures
Despite the headline-grabbing stories that would imply retail is struggling, Reis reports that the vacancy rate held steady at 9.9 percent during the first quarter of 2017 — identical to both the previous quarter and previous year.
Both asking and effective rents increased as well. Asking rents rose to $20.55 per square foot, an increase of 0.3 percent over the preceding quarter and 1.6 percent over first-quarter 2016. Effective rents followed suit, rising to $17.96 per square foot, which represents a 0.4 percent increase over the prior quarter and 1.7 percent increase over the prior year.
Additionally, the retail and restaurant industries added 383,600 new jobs, a growth of 1.4 percent over one year prior, the report notes.
— Jeff Shaw and Nellie Day