The fourth quarter of 2020 saw tepid declines in retail fundamentals that were seemingly out of step with the dire realities of the retail market nationwide, as COVID cases surged and every day brought news of another brand's imminent bankruptcy or store closures.
Research released by Moody's Analytics REIS showed that despite a waning appetite for indoor shopping among consumers, the latest numbers aren't as precipitous as you'd think. The firm's outlook predicts that most of the decline in retail rents and increased vacancies will happen in 2021, a forecast bolstered by the expectation that many struggling brands may close in the wake of the holiday shopping season. And while the recent stimulus measures will pump up consumer spending, cold weather and a new surge in COVID variants have already led to stricter shutdowns.
The retail vacancy rate increased to 10.5% in Q4, a slight uptick from 10.4% in the third quarter and the highest level since 2013, while mall vacancies also jumped another 0.4% to 10.5%, the highest level in more than two decades. New Orleans led the roster of metro areas with the largest increase in vacancy, followed by Providence, Albuquerque, Cleveland and Richmond. On the flip side, Rochester, Charleston, Fairfield County and Greenville were among those areas with the biggest decline in vacancy.
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