For a while it seemed as if brick-and-mortar retail was in recovery mode from the doom and gloom days following the Great Recession. Based on KeyPoint Partners proprietary GRIID™ data, vacancy rates in Eastern Massachusetts peaked in 2010. The region has been experiencing some stabilization in the vacancy rate in recent years, settling into the mid-8% range. However, it appears that the region will see a bump up this year: preliminary data for our KeyPoint Reports on New England retail real estate markets (being compiled now) suggests that the vacancy rate could rise significantly this year.
Enclosed malls have much to do with higher vacancy rates: the rate within this retail venue runs about a point higher than the regional rate. Much has been written about the decline in the mall industry and we’ve all seen the projections. An April report from Cowen and Co. predicted that as many as 20% of stores at some mass and middle-market mall retailers will close in the next five years; a Credit Suisse report from May forecast that 25% of all U.S. malls could shutter by 2022.. . . more