U.S. retail vacancies at 10 percent in first quarter

U.S. retail real estate vacancies was 10 percent in the first quarter of 2018, real estate research firm Reis Inc said in a report.

The rate has remained unchanged for the fourth straight quarter, despite the ongoing store closures, the report said. The vacancy rate was 9.9 percent a year earlier.

On an annual basis, 32 of 77 primary metros had a higher vacancy rate in the first quarter, the report said.

Net absorption for retail neighborhood and community centers, measured in terms of available retail space sold in the market during a certain time period, fell 83.7 percent to 453,000 square feet.

Although many metros will face continued pressure in 2018 with Toys ‘R’ Us, Bon-Ton, Aerosoles and J. Crew closing stores, new occupants have filled a number of these spaces, according to the report.

Only 712,000 square feet of new construction was completed in the quarter, a 74.4 percent drop from a year earlier.

Asking rents per square foot for retail neighborhood and community centers rose 1.9 percent, while effective rent per square foot rose 2.1 percent, the real estate research firm said.

The recently enacted Tax Reform and Jobs Act may improve discretionary income, providing a boost to consumer confidence and the overall retail sector, the report said.