The 5.9-million-square-foot Syracuse community-neighborhood shopping center market has seen rents improve so far in 2012, Reis reports. Vacancy, however, has tacked up after a first quarter decline. Reis reports second quarter community-neighborhood vacancy at 15.1%, up 30 basis points over the quarter and up 60 year-over-year. First Glance data from Reis indicate a third quarter vacancy rate of 15.0%. Power Center vacancy is reported at 4.4%, down 50 basis points year-over-year.
As vacancy has wavered, community-neighborhood center net absorption has been irregular of late. The second quarter saw 19,000 square feet of negative demand, although the first quarter of 2012 saw 15,000 square feet on the positive side. The total for all of 2011 was negative 37,000 square feet, and the market has recorded several years of negative demand going back to 2009. Demand has been low at a time when very little new product has come on line. With the August completion of the Carousel Center Expansion/Destiny USA regional mall, there is no retail space under construction in the area. No community-neighborhood center space has completed here since 2008, and none is forecast until 2015. Reis therefore expects vacancy to finish close to 15.0% in 2012 and 2013, after which it will gradually decline.
As noted, rents have shown strength recently. Reis reports second quarter average asking and effective rents of $12.51 psf and $10.62 psf, both up 0.3% for the quarter. These rates are up 1.1% and 1.0%, respectively, year-over-year. The Power Center average asking rent is reported at $19.35 psf, up 0.7% year-over-year. First Glance data from Reis indicate a third quarter community-neighborhood asking rent of $12.55 psf. Gains of about 1.0% for both rental categories are forecast for 2012. Not until 2014 does Reis forecast asking rent gains of 2.0% or more.