More pain on the national retail scene

Reis reports that vacancies at US malls are now at a 10-year high and expected to rise further:

“So much of consumer spending depends on the wealth effect,” said Victor Calanog, director of research at Reis. “Unfortunately, all three conditions are still in flux. Even when they stabilize we often observe anywhere from a 12- to 24- month lag until commercial retail properties begin benefiting.”

US mall vacancy rates increased to 7.1% in 4Q 2008, with shopping centers rising to 8.9%.

Meanwhile, retailers are exerting pressure on landlords to lower rents as the recession impacts their sales. Leasing conditions are the toughest they've been for several years, with landlords having to decide whether to offer concessions or force retailers into liquidation.