“There is no incentive to add more retail space,” said Sohn, who is also vice chairman of Forever 21 Inc., a Los Angeles-based closely held clothing chain. “The probability of getting financing for a mall is still low. Shoppers have become more price-conscious and they’re looking more than buying.”
While retail sales have rebounded and exceeded pre- recession levels, new shopping space may “continue to be minimal,” said Chris Macke, senior real estate strategist at Washington-based CoStar. A drop in vacancy rates at malls and a rise in rental prices will depend on how quickly hiring picks up, he said. Credit is “still difficult,” and “there just isn’t a lot of demand to justify” store expansions.
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