As 2017 completes half of its unpredictable run, the story of retail remains predictable: It’s still not looking good. Asking rents in the region remained stable, but a tsunami-strength wave of store closings washed away hopes for vacancy improvements, as numerous department store anchors and strip mall regulars bid farewell to their physical locations – adding 2.1 million square feet of retail vacancy to the region.
However, there is still hope – if you are a healthy, fast-casual restaurant chain or a boutique fitness center, catering to the oft-grumbled-about needs of millennials. Additionally, entertainment and medical groups continue to secure new ground, injecting some much-needed vitality into the market.
Looking closer at the region’s submarkets, vacancies in suburban Pennsylvania, central Pennsylvania, and southern New Jersey suffered the most, as numerous Macy’s, JC Penneys, and hhgreggs drew their last breath. Additionally, investment volume was down from 2016’s levels, but the retail portion of the King of Prussia Towne Center was purchased at a high-water-market price for the Philadelphia market. Lastly, Amazon’s newest protégé Whole Foods will be seeing two new locations on the sight of a former Kmart at Exton Square Mall and at Springhouse Village Center.
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