By Ruters Sunday, March 16, 2014
Bargain retail lifts U.S. shopping centers as big names stumble
(Reuters) – Bargain store chains are flooding into North American malls and shopping centers like never before, upstaging old mainstays like J.C. Penney and Sears that are reeling from the one-two punch of an ailing economy and competition from online stores.
“We’re seeing a seismic shift in retail shopping centers,” said Garrick Brown, director of research at real estate firm Cassidy Turley. “The challenges of the weak economy are being replaced by the challenges of e-commerce.”
The shift may reflect some consumer pain, but it has brought plenty of winners, too. Commercial real estate rents are rising, and many retailers, especially bargain chains, are in better shape than they have been since the Great Recession in 2008, analysts say. Shopping center vacancy rates in 60 major U.S. markets fell to 8.6 percent at the end of last year from 9.5 percent a year earlier, reflecting 38 million square feet of occupancy growth, according to Cassidy Turley research.