Lower Rents Driving U.S. Retailers to Expand, CB Richard Says
More than half of U.S. retail chains plan to open more stores because of lower rents, a report by CB Richard Ellis Group Inc. (CBG) found.
Fifty-nine percent of retailers surveyed said “compelling rent levels” are encouraging them to expand, according to Anthony Buono, executive managing director of CB Richard Ellis’s retail services group for the Americas. The company, based in Los Angeles, is the world’s largest commercial real estate services firm.
“A significant number of retailers will be taking advantage of an opportune time for growth,” Buono said in an e- mailed statement. “Luxury goods, wholesale clubs and discounters in particular are expected to continue to expand.”
Vacancies at U.S. regional malls and shopping centers rose in the second quarter as the jobless rate remained above 9 percent and online competition grew, Reis Inc. (REIS), a New York-based real estate research company, reported in July. Rents at regional and super-regional malls are down 5 percent since peaking in the third quarter of 2008. At community and neighborhood shopping centers, rents are 3 percent below their peak reached in the second quarter of the same year.
The U.S. economy should regain momentum through the year, according to CB Richard Ellis’s report. The “confluence” of U.S. and European debt problems, turmoil in the Middle East, destructive weather in the U.S. and Japan’s earthquake “has led to a painfully slow recovery, but one that will not be derailed,” Buono wrote.
Views of Economy
About 27 percent of retailers view the U.S. economy as improving, compared with 35 percent a year earlier. The survey showed 45 percent of retailers see the economy as stable, up from 35 percent. Another 27 percent said recovery has already occurred within their market segment.
Use of social networks is increasing, with 93 percent of retailers saying they rely on services such as Facebook and Twitter to market their products, up from 70 percent a year earlier.
CB Richard Ellis’s annual survey of U.S. retailers was taken during June and July. Of about 200 surveyed, 58 percent are national retailers, 26 percent are global and 15 percent are regional, according to the report.
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