Older shopping centers still struggle to fill spaces
San Francisco, CA -- (SBWIRE) -- 01/11/2013 -- At the open of 2012, commercial real estate brokers displayed some property that had individuals excited. Now at the start of 2013, many simply want to be done with them.
“I think we all just wanted it to be behind us,” said Greg Phaneuf, a principal at Cushman & Wakefield Colorado Springs Commercial. “We still want it to be behind us.”
A feel of disheartening realization that worst being over is not the end of the deal for those in the area. The recovery process must now begin and that will depend on jobs.
With the unemployment mark still unrelentingly high, many commercial and industrial spaces remain with high vacancies. The lease rates for these areas remains low, according to the brokers from Sierra Commercial Real Estate Cushman & Wakefield, Hoff & Leigh Commercial Real Estate and Quantum Commercial Group.
In 2011, there was plenty of commercial real estate at the end of 2011, and at the start of 2012, brokers declared a turn in the market. Unfortunately, no declaration changes facts, and activity slumped soon after, leading to the predicament now.
That is why residence and brokers alike are not ready to celebrate the signs of positive growth just yet. There have been a handful of sales at the end of 2012, signifying a possible turnaround. With rumors abound of further purchasing, the hope of big sales in 2013 is, as of now, more of a withheld hope.
There seems to be genuine interest within the institutional investors who are making their way to buys in the Colorado areas.
“The question is, can it be sustained,” said Brian Wagner, a broker at Sierra Commercial Real Estate.
“There are a lot of good things out there,” said Mark Useman, a broker at Sierra who primarily focuses on retail spaces.
Unemployment stays begrudgingly at 9%, and the city's population continues to see expansion, which does mean more housing sales and expansion.
Retail sales have been strong as of late, but the vacancy climbed from 10.58% in 2011 to a solid 11% in 2012. Aging shopping centers appear to have been his the hardest. Centers that were built after 1994 have 3.42% vacancy, while those built before have a 19.67% vacancy. This, despite the comparative affordability of the older spaces, at a $10.88 per square foot, as compared to $23.26 average of the new centers.
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