Loss of tenants at neighborhood shopping centers is slowing

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Market conditions are improving slightly for retail landlords, a new report says – or, more accurately, conditions are worsening at a slower pace these days.

Vacancy at neighborhood shopping centers, which are usually anchored by a grocery store, grew at the smallest pace in the fourth quarter of 2009 since the end of 2007, according to analysis released Wednesday by CBRE Econometric Advisors. About 12.4% of the space in such centers was empty at the end of last year.

The analysts predicted that vacancy will peak at 12.8% in the third quarter of this year.

‘After the dismal conditions of the retail real estate market during the past two years there are signs of stabilization,’ said economist Abigail Marks of CBRE.

Although 2009 was one of the worst years on record for net loss of occupied space at more than 19 million square feet nationwide, the negative trend has been diminishing since peaking in the first quarter of last year. This year will also see a net loss of rented space, but conditions will turn positive in 2011 as landlords see more space rented than vacated.

-- Roger Vincent