Shuttered Retail Isn’t Driving Down Rents

Retailers nationwide have closed more than 2,000 stores this year alone. But research by Reis indicates that the wave of closings isn’t yet driving down retail rents.

The Reis database includes properties located in 77 of the 80 primary retail markets. The company has identified 28.9 million square feet of closed stores in the last two years. Reis’ report finds there is “very little evidence suggesting that the closings had a direct impact on retail rents,” and notes that “those with more store closures in general have seen a sharper deceleration in rent growth, but only a few have seen rent declines.”

The report cautions that the “study includes mall and power center closings, yet the rent data used in this study pertains to neighborhood and community shopping centers.” It notes that many smaller shopping centers feature small retail outlets consumers need at the last minute, so that may be shielding those shopping centers from e-commerce competition or the closing of a large store nearby.


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