The vacancy rate in retail properties along Northern New Jersey’s six major shopping corridors reached 8% in April, according to R.J. Brunelli & Co., LLC. This compared with a 6.6% vacancy factor in the firm’s previous study, which was conducted in February 2009. Of the six highways, only one–Route 4–saw its vacancy rate decline from 2009 levels.
The locally based retail real estate brokerage shifted the study period for its annual surveys of the Northern and Central New Jersey retail real estate markets to April from February. “Given the fact that retailers often wait until after the holiday season to begin liquidating failing stores, we felt that conducting the study in April would give a better, ‘post-shakeout’ view of the market, going forward,” explains Richard Brunelli, president of the firm.
The firm’s twentieth annual study of the six-county Northern New Jersey market found 2.27 million square feet of vacancies in the 28.53 million square feet of space reviewed along the six corridors, with availabilities seen in 174 of the 816 properties evaluated. This compared with 1.84 million square feet of vacancies in 27.96 million square feet of space in the 2009 study, in which openings were seen in 118 of the 808 properties reviewed. For nine of the prior 10 years, the region’s rate had stayed in a very narrow range of 2% (2003) to 3.6% (2008), before escalating to 6.6% in 2009.
After driving 58% of the vacancy factor in the firm’s 2009 survey, big box spaces exceeding 20,000 square feet accounted for approximately 973,000 square feet, or 43%, of the region’s total vacancies. Of the vacant big box space, approximately 814,000 square feet, or 84%, came from stores that were dark in the 2009 survey–and, in some cases, have lingered from prior years. The remaining 159,000 square feet, or 16%, were from new vacancies along the six corridors. Eight vacant big box spaces totaling approximately 273,000 square feet were absorbed during the past year.
“The results underscore the difficulty landlords are experiencing in attempting to fill big box vacancies arising from the earlier bankruptcies or closures of such major chains as Circuit City, Linens ‘n Things, National Wholesale Liquidators, Levitz, CompUSA and Home Depot Expo, as well as selective closings by chains like Pathmark, Office Depot and Office Max,” Brunelli tells GlobeSt.com. “While a number of national and regional chains have stepped up to the plate and snapped up some of these prime locations at favorable rents, it could be some time before this glut of big box inventory is fully absorbed.”