The vacancy rate of U.S. neighborhood and community shopping centers was flat in the first quarter at 10%, while the vacancy rate of U.S. malls ticked 0.1% higher from the 2017 fourth quarter to 8.4%, according to Reis Inc.
Nationally, asking and effective rents at shopping centers both rose 0.4% quarter over quarter to $20.96 and $18.34, respectively, representing year-over-year gains of 1.9% and 2.1%.
Mall rents ticked up 0.5% on a quarterly basis and 1.6% annually, but the increases masked the disparity between high-performing class A malls and poorly performing lower-end malls, Reis said.
Net absorption during the quarter totaled 453,000 square feet, the lowest amount in more than five years, Reis noted.
Construction was much lower than average as well, at 712,000 square feet, compared to the 3.1 million-square-foot quarterly average of 2017. While construction activity is usually low in the first quarter compared to other periods, the first quarter of 2018 was particularly sluggish for leasing and construction, Reis added.
Reis reported that 32 of 77 primary U.S. metros logged an increased vacancy rate in the first quarter, with Lexington, Ky.; Tacoma, Wash.; Wichita, Kan.; and Nashville, Tenn. seeing the largest increases. Dayton, Ohio; Richmond, Va.; Seattle; and Orlando, Fla. had the greatest decreases in vacancy.
San Francisco had the lowest vacancy rate, at 3.2%, followed by Orange County, Calif.; San Jose, Calif.; and Fairfield County, Conn.
Effective rents declined in 11 metro areas, led by Central New Jersey; Albuquerque; and Tampa-St. Petersburg, Fla.