Retail vacancy rates remain stagnant, rental rates drop in Q4
Figures for quarter 4 are out and Boston’s retail market remained relatively stagnant. In fact, the vacancy remained at a constant 4.4% between quarters and vacant subleased space only increased by a negligible 38,829 square feet. Over the past year, Boston’s retail market has experienced an overall decrease in vacancy rates from 4.5% in Q1 to 4.4% in Q4. Likewise, the vacancy rate of subleased space has decreased over the same time period. There is currently 562,970 square feet of vacant space available in the Boston area.
The graph above depicts trends in retail vacancy rates in recent years. As you can see, rates have been relatively stagnant across the board in the past year, with the exception of specialty centers which experiences a significant decrease in the past year.
Rental rates decreased to $15.59 per square foot in the fourth quarter, down 1.6% from $15.84 in the third quarter. However, on the whole rental rates have increased by 0.83% over the past four quarters.
18 buildings totaling 309,357 square feet in new space were completed in the fourth quarter. By the end of the fourth quarter, there were 1,279,470 square feet underway. In 2012, a number of notable construction project were completed such as Merrimack Premium Outlet and a Wal-Mart Supercenter.
Historically, the delivery rate for 2012 has been far below average for the Boston area. In fact, it has been since 2010 when it was at a historical low.
Source: CoStar Retail Report