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It’s a tenants’ market at retail centers

5/30/2017

Despite the rash of recent store closings, leasing activity is strong at malls and shopping centers as retailers take advantage of favorable terms.



That’s the take of Mizuho Securities analysts following conversations with major broker organizations at the International Council of Shopping Centers RECon Show in Las Vegas last week.



Mizuho’s fears over near-term occupancy rates in retail centers were eased by brokers reporting that leases were being signed at “still positive” spreads. Brokers also told analysts that more REITs are paying leasing commissions to brokers, suggesting a more defensive mind-set on the part of landlords better rental terms for tenants.



“We think negative retail psychology and lack of near-term asset pricing discovery likely keep some investors on the sidelines though the retail REITs appear set up well for a short-term relief rally,” Mizuho analysts said.


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