Retail Real Estate -- Slow Recovery
The economy’s mixed signals mean a slow rebound for retail real estate, according to research by CB Richard Ellis, the Los Angeles–headquartered commercial real estate firm.
Business is improving, according to CBRE’s MarketView report, for the first quarter of 2011 commercial real estate business. But the recovery is hampered by mixed market news, including improving retail sales and a still-high unemployment rate in California, which stood at 12 percent in March but dropped to 11.9 in April, according to the Employment Development Department.“The industry’s fundamentals remain relatively weak and are expected to experience a slow rebound,” according to the report.
The overall retail vacancy for Los Angeles County was 6.3 percent in the first quarter of 2011. The vacancy rate increased 5.3 percent compared with the same time the previous year, according to CBRE.
But good opportunities remain in retail real estate, said Jay Luchs, an executive vice president for CBRE. “We’re not back yet,” he said of the economy. “But there have been good leases signed. While there are not 10 tenants competing for one space, there are two tenants competing for the space these days—and there is action.”
Mixed news continued to dominate retail real estate headlines in the first quarter for 2011. According to research firm CoStar, a Washington, D.C.–based real estate information company, retail vacancy was down for Los Angeles County malls in the first quarter of 2011. Vacancy rates declined to 3.1 percent, compared with a 3.2 percent vacancy in the fourth quarter of 2010. But the main reason for the decline was no new construction of malls.—Andrew Asch
