Slowing Sales Foretell Weakening

Article By Ryan Chittum Via RealEstate Journal

Rents at shopping malls rose in the second quarter at their fastest clip in nearly three years, and strip malls posted solid increases as vacancies decreased in both sectors, a survey shows.

But weakening second-quarter retail sales have damped growth and could slow it further in later quarters as economic pressures squeeze consumers. For the second straight quarter, absorption -- the net change in occupied space -- showed signs of weakness. Tenants absorbed 4.9 million square feet in the period, up from 3.3 million in the first quarter, but well below the two-year average of about seven million square feet per quarter.

Retail sales moderated due to a variety of pressures, from high energy prices to rising interest rates and a slowdown in the once-booming housing market.

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