The report also notes that the vacancy for retail space has increased by two million sf with the vacancy rate rising from 7.3% last year to 8.3% this year. According to William Beckeman, a partner at Finard & Company, the increase is not drastic. "Its what you would expect," he tells GlobeSt.com. "An influx of retailers cushioned the blow" of those who left.

Beckeman points out that Bradlees, the discount retail chain that went under last year, can account for nearly all the increase in the vacancy rate. Nearly all the Bradlees leases are being taken over by Kohl's. But there are potential closures down the road with Kmart, Ames and Service Merchandise all faltering. "We expect Kmart and Ames to close some stores but it's unclear how many," says Beckeman. But he adds that if Ames or Kmart survive as ongoing entities its unlikely that the area will see much liquidation.

Beckeman also notes that the area is now further along the curve of national retailers who didn't have a presence here before. Over the next few years, that influx will probably slow down. "There are not a lot more who aren't here," he says, noting that Wal-Mart, Target and Best Buy are recent entrants to the area.

According to the report, new construction added three million sf of additional retail space with 30% of that increase coming from two large projects. One is The Loop in Methuen, a shopping center with Home Depot, Loew's, Stop & Shop, Marshall's and Old Navy as anchors. The other is the Gateway Center in Everett that has Home Depot, Target and Bed, Bath & Beyond as anchors. Supermarkets accounted for 6% of new construction.

As far as rental rates go, Beckeman says that its hard to quantify in the retail sector but he notes that he's seen a "modest softening which has been more pronounced in inferior locations."

Instant Insights /

Area Sees 2.9-MSF Growth in Retail Supply

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