Las Vegas real estate, mortgage, appraisal blog

Everyone has heard about Starbucks closing 600 stores but the coffee chain is not the only one feeling the pinch. Vacancies in malls and strip malls are on the rise, with more and more stores closing locations. Low-cost warehouse-type and grocery centers are noticing the increase as more americans are narrowing their budgets, according to an article on CNBC.

GAP is looking to give up some of the 40 million square feet of retail space it leases. That's in addition to the growing list of retailers, such as Linen 'n Things and Goody's Family Clothing, which filed for bankruptcy protection.

For the first time since 1980, more space became available to rent at strip malls than was rented out -- about 3.2 million square feet more. Part of the available space came in the form of 5.7 million square feet of new development that came on the market during the quarter.

The extra space translated into falling rents at strip malls, down 0.1 percent to an average of $17.60 per square foot.

"The downward pressure on rent is coming from landlords being very nervous about the idea of losing a tenant when they know that there's a paucity of replacements for that tenant in the current market environment," Chandan said.

Now that retail businesses are being affected many are wondering just how long this will continue. Second quarter of this year was the worst for strip mall owners in 30 years. Hopefully the trend will not continue. For now we can only wait and watch and see.