The 11.7-million-square-foot New Haven community-neighborhood shopping center market doesn’t have much going on. The vacancy rate was 12.5% in the second quarter of 2012 thanks to zero net absorption and zero new supply. It was down 10 basis points from a year earlier. Preliminary third quarter data show no change in the vacancy rate. There has been no new supply in this market since 2010, but a 15,500-square-foot neighborhood center is under construction in Wallingford for completion in late 2012 or early 2013. Reis predicts the vacancy rate will end 2012 at 12.5%, with little change in the following two years.
Community-neighborhood shopping center rents are flat to falling. In the second quarter both the average asking rent and the average effective rent fell 0.2%, to $16.12 psf and $13.72 psf, respectively. Rents were essentially unchanged from a year earlier. The asking average edged up 0.1% in the third quarter, according to preliminary data; the effective average had been flat through August. Reis predicts rents will fall 0.7% by both measures for all of 2012, with a small increase of just over 1.0% predicted for 2013. The market is expected to begin to improve thereafter, with annual rent gains of 2.5% to 4.0%.
Retail activity is quiet in other categories as well, generally located in older cities and pushed unsuccessfully to local governments. The 458,000-square-foot four-phase retail portion of the Renaissance Place mixed-use project in Naugatuck has yet to get off the ground. A 51,400-square-foot mixed-use project, Shoppes at College Square, is planned for central New Haven. A 500,000-square-foot lifestyle center, the Shoppes at Cheshire, has been proposed for Cheshire, off I-691.