Mall vacancies on the rise
There was more bad news for mall this past week as the Wall Street Journal reported on Monday that the vacancy rate continues to rise.
The vacancy rate was 8.6 percent in the second quarter, up from 8.4 percent in the first quarter. Consumers continue to shift their shopping patterns from brick-and-mortar outlets to online.
It’s the highest mall vacancy rate in more than six years as reported by real estate data research firm Reis Inc. The previous high was 9.4 percent in the third quarter of 2011.
That should come as no surprise to Kankakee-area residents. The Daily Journal reported in May the astounding vacancy rate at Northfield Square mall was more than 60 percent. The Bradley mall soon will be down to just one anchor store — J.C. Penney.
Sears closed its doors in April, and the two Carson’s stores are just weeks away from closing.
The 527,000-square-foot mall opened in 1990. Sears accounted for 107,000 square feet, and the Carson’s, with both the men’s and women’s stores, will account for a total of 141,000 square feet.
Both Carson’s stores are in the midst of liquidation sales where consumers can buy goods for more than 50 percent off.
Local governments that depend on retailers to create jobs and generate tax revenue are among those feeling the pain, the Wall Street Journal story said. The rising vacancies also are dotting the retail landscape with empty shopping centers.
The WSJ story also said some mall landlords are finding other uses for the space, utilizing the empty stores as gyms, call centers and churches.
The outlook for malls across the country is not good, as a recent economic analysts estimated 20 to 25 percent of U.S.’s 1,100 malls could be out of business by 2022.
In addition, the last Toys “R” Us stores closed on June 29 after a restructuring attempt failed, the WSJ story underlined. In March, when it announced the liquidation of U.S. stores, the company had roughly 800 stores in the country, including ones in Matteson on Lincoln Highway and in Burbank at 7750 S. Cicero Ave.
In the first quarter, e-commerce sales accounted for 9.5 percent of total retail sales after adjusting for seasonal variations, up from 9.1 percent in the previous quarter, according to data from the U.S. Census Bureau.
SOME GOOD NEWS
The news isn’t all bad in Kankakee County as the Party City store recently completed a move from the Water Tower Plaza in Bourbonnais to the former home of the Gap clothing store in the Bradley Commons shopping center, which is anchored by Kohl’s, Dick’s Sporting Goods and Walmart. The new Party City location, a 4,000-square foot store, is adjacent to Dick’s.
The Gap store closed in January of 2017 after opening in 2011.
The vacated 11,400-square-foot Party City store, which is just south of the Target store, will become the new home for an Old Navy store. It’s expected to be open in early 2019.
The WSJ also noted well-located malls that cater to more-affluent consumers are still seeing strong tenant demand and rent growth. Reis data showed that mall rents grew 0.3 percent in those locations in the second quarter despite rising vacancies.