Improving Economy Helps Retail Landlords Boost Rents

Retail rents rose in the first quarter of 2014 to levels not seen since 2008, amid an improving economy that has seen a dearth of new retail development in recent years, according to data from Reis Inc. Average rates now sit at $19.42 per square foot at smaller centers, an increase of 0.4% from the fourth quarter of 2013, and at $40.15 per square foot at large regional centers, up half a percentage point. Strip center vacancy sits at 10.4%, unchanged from 2013’s fourth quarter. Retail landlords are seeing increased opportunity to seek higher rates of retailers. “[T]hey’re not interested, necessarily, in paying the rents needed to justify new construction,” says Andrew Alexander, CEO of Weingarten Realty Investors.

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