The 9.9-million-square-foot Columbia community-neighborhood shopping center market continues to improve. New supply shut down after 2007, a year before net absorption turned negative, and the year-end vacancy rate peaked at just 12.7%. The second quarter rate was just 11.1%, down 50 basis points on 42,000 square feet of positive net absorption. The average asking rent increased 0.2% in the second quarter to $12.31 psf, while the average effective rent was up 0.4% to $10.30 psf. Rents are now up 0.2% asking and 0.3% effective from a year earlier.
Community-neighborhood vacancy was unchanged through August, and rents rose a couple of additional cents by both measures. New supply has resumed, with two neighborhood centers—the 72,000-square-foot Cross Hill Market in east Columbia and the 61,725-square-foot Hendrix Crossing in Lexington—under construction. Neither is expected to open in 2012, and the vacancy rate is forecast to fall to 10.8% at year-end before leveling off. An increase in average rents of 0.7% by both measures is forecast for this year. Subsequent annual gains are also forecast at around 1.0%.
In the power center market, the vacancy rate fell 40 basis points in the second quarter to 4.3%, down 30 from a year earlier. The average asking rent for power centers is $18.98 psf, up three cents from a quarter earlier and three cents from a year earlier.
Southeast Real Estate Business reports a vacancy rate of 8.34%. “The declining vacancy rates and lack of significant supply is putting upward pressure on rental rates. According to 2012 mid-year retail reports, average asking rates for available junior anchor space increased by $1.38 psf to $13.09 psf, while average asking rates for available small shop space increased by $1.92 psf to $13.98.”