If a commercial property doesn't have a 5% vacancy rate it's an indication the rents are too low.
When seeking financing for a 100% occupied property an institutional lender will underwrite it as if there were at least a 5% vacancy rate.
If a commercial property doesn't have a 5% vacancy rate it's an indication the rents are too low.
When seeking financing for a 100% occupied property an institutional lender will underwrite it as if there were at least a 5% vacancy rate.
This is another thing. Fifth Ave. in Manhattan will always have more vacancies than Fordham Rd. in the Bronx. That does NOT mean that Fifth Ave. is less desirable; it's just a very different tenancy and ownership structure.
While 12 Oaks is no Fifth Ave. [[or even Somerset) owners like Taubman want the "right tenant" and are willing to wait to curate the appropriate retail mix.
12 Oaks isn't going anywhere. I was there a couple of months ago picking stuff up at Sears at lunchtime, and the place was hopping. At noon on a work day. The empty storefronts are a recent development as of last year, as other posters have said, when H&M decided to expand.
The same thing happened to Somerset when Zara opened up, a bunch of stores had to relocate causing more empty storefronts for a year or so, but they are quickly filling back up.
The low end malls are dying. The mid-range malls are hanging on. The high end malls are doing fine. I think there will always be a real-estate market for indoor shopping areas, especially in places where the peak shopping season is cold and snowy.
I don't know anything about 12 Oaks, but I have observed more vacancies on 5th Avenue than there used to be. And this doesn't seem to be just anecdotal: http://www.nreionline.com/retail/hig...-falling-rentsThis is another thing. Fifth Ave. in Manhattan will always have more vacancies than Fordham Rd. in the Bronx. That does NOT mean that Fifth Ave. is less desirable; it's just a very different tenancy and ownership structure.
While 12 Oaks is no Fifth Ave. [[or even Somerset) owners like Taubman want the "right tenant" and are willing to wait to curate the appropriate retail mix.
Note that neither I nor the article are implying that high-end retail is dying or anything of the sort. Retrenching, perhaps.
I have worked along the tony stretch of Fifth Avenue for a few years. There was definitely a bit of turnover but it's a long way from becoming abandoned. It seems like there is a bit of a retreat of the ultra-luxury retailers, but that space is still being absorbed. For instance, Microsoft converted a former Fendi space a couple of years ago. Across the street Uniqlo built their largest store in NYC.I don't know anything about 12 Oaks, but I have observed more vacancies on 5th Avenue than there used to be. And this doesn't seem to be just anecdotal: http://www.nreionline.com/retail/hig...-falling-rents
Note that neither I nor the article are implying that high-end retail is dying or anything of the sort. Retrenching, perhaps.
However, this is completely different from a dying mall situation. Fifth Avenue will always have shoppers as long as it's a business and tourism hub. Twelve Oaks, or any other enclosed mall, doesn't enjoy that luxury. If the tastes for the enclosed shopping mall go away - plenty of evidence suggests that to be a national trend - then it is over since it is a model built on people going out of their way to get to it.
Last edited by iheartthed; May-05-18 at 12:40 PM.
It seems the whole rideshare/driverless car direction conflicts with the decline of the destination mall. The plazas and big box stores are for running in and out with your car while the rideshare would drop you off and pick you up from the mall a couple of hours later. Of course the alternative to both is to shop at home on your computer.
Do people really hail Uber/Lyft to go to malls? I don't think Uber/Lyft apps have much of an effect, tbh. Taxis have existed longer than malls, and Uber/Lyft is just a taxi service. If malls would flourish because of the ability to hail a ride then malls would be inundated with taxis. I rarely see meaningful amounts of taxis at any mall.It seems the whole rideshare/driverless car direction conflicts with the decline of the destination mall. The plazas and big box stores are for running in and out with your car while the rideshare would drop you off and pick you up from the mall a couple of hours later. Of course the alternative to both is to shop at home on your computer.
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