C — November 22 - December 5, 2013 — Shopping Centers — Mid Atlantic Real Estate Journal
www.marejournal.com
S hopping C enters As pressures on smaller spaces offset ‘big box’ gains Brunelli survey finds Central NJ retail vacancy rises to 9.8%
/DQFDVWHU O The Old Bridge-based retail real estate brokerage’s 24th annual study of the central New Jersey market uncovered 2.95 million s/f of vacancies in the 30.22million s/f of space studied along State Highways 1, 9, 18 and 35 in Mercer, Middlesex and Monmouth counties, and a small section of Ocean County. Improvements on Routes 1 and 18 were countered by rising va- cancies along Routes 9 and 35. Over the last 10 years, the four corridors had their strongest performance in 2006, when the combined vacancy factor stood at just 3.4%. All told, availabilities were seen in 192 of the 796 sites visit- ed throughout the region during this year’s second quarter. The study evaluated shopping cen- ters and freestanding buildings exceeding 2,000 s/f—including restaurants, auto service facili- ties and vacant auto dealerships whose location and configura- tionmakes themviable for retail use. Regional malls and centers under construction or major re- development are excluded. When combined with the slight year-over-year decline in the vacancy factor for six northernNJ highways reported last week (to 8.1% from 8.2%), the overall vacancy rate for the 10 retail corridors surveyed by R.J. Brunelli in the central and northern parts of the state increased to 9.0% from 8.7% in 2012. The firm found a total of 5.35 million s/f of empty space in the 59.71million s/f reviewed, with big-box spaces represent- ing 2.15 million s/f, or 42.1%, of the vacancies. “For central NJ, the encour- aging news over the past 12 months was the net absorption of over 225,000 s/f of big-box va- cancies, including some that lin- gered on the market for years,” said Richard J. Brunelli , president of the firm. “But even as a still-too-high big-box inven- tory continues to shrink, that positive trend is being countered by growing numbers of smaller- store vacancies up and down the region’s corridors. As we saw in northernNJ, much of the small- space woes can be attributed to a combination of unprofitable or marginally profitable ten- ants shutting their doors as leases expire and the inability of small chains, mom & pops and franchisees to take advantage of those vacancies because financ- ing for newventures or business expansion remains so difficult to get. Until the economy improves and banks genuinely start to loosen the spigots, it will be dif- ficult to make much of a dent in the small store inventory.” In terms of the region’s big- box inventory, a total of 1.09 million s/f remained available, amounting to 39.1% of the corridors’ vacant space, down from a 47.1% share in 2012 and 54.5% in the firm’s 2012 survey. “Landlords have been able to find newcomers for well-located properties, but others remain difficult to fill, underscored by the fact that approximately 74% of the region’s vacant big-box space has been on the market for three years or more,” Mr. Brunelli noted. n LDBRIDGE, NJ —Af- ter dropping from a 10- year high of 10.5% in MEAN FOR YOU? 2011 to 9.1% in 2012, the retail vacan- cy rate along central New Jersey’s ma- jor shopping corridors in- creased again to 9.8% this 1Pa[ThB]hSTaXb_a^PRcXeTfXcW^daR[XT]c aT[PcX^]bWX_b FTd]STabcP]Sh^daQdbX]Tbb P]SX]SdbcahP]SPRcXeT[h[XbcT]c^h^da ]TTSbR^]RTa]bP]S^__^acd]XcXTb Richard Brunelli summer, according to R.J. Brunelli & Co., LLC , as prog- ress in ‘big-box’ spaces of 20,000 s/f or more was thwarted by growing closures of smaller shops. ATP[4bcPcT}2^]bcadRcX^]}1dbX]Tbb};XcXVPcX^]}4\_[^h\T]c} Visit us at Booth #472 ICSC NY Conference + Deal Making Your Property. Our Priority. ENVIRONMENTAL & ENGINEERING CONSULTING SERVICES HILLMANN CONSULTING, LLC is a full-service Environmental and Engineering Consulting firm providing an array of customized Environmental Health and Occupational Safety, Remediation Support, Sustainability Consulting, Environmental Due Diligence, Geology and Laboratory services. For more information contact us at (800) 232-4326 Or visit our website at: www.hillmannconsulting.com Office Locations: New Jersey, New York, Pennsylvania, Massachusetts, Virginia, North Carolina, Florida, California
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