Chicago — According to a report by Cushman & Wakefield, shopping center vacancies hit a record low in the fourth quarter of 2022. Quarterly vacancy rates fell 20 basis points to 5.7 percent.
Of the 81 markets tracked by the firm, 66 saw positive net absorption. Chicago recorded the highest net absorption at 1 million square feet, followed by Phoenix at 788,000 square feet; 574,000 square feet in Atlanta; 422,000 square feet in Denver; 397,000 square feet in Washington, DC; 392,000 square feet in Dallas/Fort Worth; and 353,000 in New York City.
Several major cities saw net decreases in absorption over the same period, including Philadelphia; Hartford, Connecticut; and Buffalo and Albany, New York. Asking rents increased 0.8 percent quarter over quarter to an average of $22.99 per square foot.
“The economic backdrop has become very uncertain in recent months as retailers prepare for more challenging conditions in 2023, but retail fundamentals have not yet softened,” said Barrie Scardina of Cushman & Wakefield. “Consumer behavior remained healthy at the end of the year: pedestrian traffic in shopping centers exceeded 2019 levels in the last two weeks of December and Christmas sales are expected to be slightly positive. Inflation remains a concern for shoppers and retailers, although the rate of inflation has moderated in recent months.”
—Hayden Spit
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