Economy Watch: Retail Vacancies Edge Down
Reis Inc. reported on Wednesday that the vacancy rate for regional malls declined to 8.6 percent in the fourth quarter of 2012, down from 8.7 percent in the third quarter and 8.9 percent in 4Q11.
By Dees Stribling, Contributing Editor
Reis Inc. reported on Wednesday that the vacancy rate for regional malls declined to 8.6 percent in the fourth quarter of 2012, down from 8.7 percent in the third quarter and 8.9 percent in 4Q11. The highest the vacancy rate has gotten during the most recent cycle for regional malls was 9.4 percent in the third quarter of 2011.
For neighborhood and community malls (the fancy names for strip center), the vacancy rate declined to 10.7 percent in the fourth quarter, down from 10.8 percent in the third. For strip centers, the vacancy rate peaked most recently at 11.1 percent, also in 3Q11.
Considering the lackluster demand for retail space in most markets, new construction remained near record‐low levels during the quarter. According to Reis, 915,000 square feet of retail was delivered during 4Q12, an uptick compared with the 723,000 square feet of the third quarter. But compared with the fourth quarter of 2011, the 4Q12 numbers were distinctly slow, since about 2.95 million square feet of retail was delivered in 4Q11. The fourth quarter 2012 total is the fifth‐lowest figure on record since Reis began tracking quarterly data in 1999.
Flu season to have economic impact
From the department of “if it isn’t one thing, it’s another”: On Wednesday, outplacement specialist Challenger, Grey & Christmas warned of the impact of this year’s flu season on the economy. The flu has been unusually aggressive in infecting people this year, and Challenger pointed out that the Centers for Disease Control and Prevention estimates that, on average, seasonal flu outbreaks cost the nation’s employers $10.4 billion in direct costs of hospitalizations and outpatient visits.
This year’s will be much more than that, though it isn’t clear yet how much more. The estimate also doesn’t include the indirect costs related to lost productivity and absenteeism. So far, 29 of 41 states reporting flu cases say the outbreak is at “severe” levels.
“The economy is still on shaky ground and many workers continue to be worried about losing their jobs, despite the fact that annual layoffs are at the lowest level since the late 1990s,” Challenger CEO John A. Challenger noted in a press statement. “In this environment, workers are reluctant to call in sick or even use vacation days. Of course, this has significant negative consequences for the workplace, where the sick worker is not only performing at a reduced capacity but also likely to infect others.”
In an age when just about anything can go viral, the trillion-dollar coin is having its 15 minutes of silly fame. The United States does, in fact, already produce platinum coins, a one troy ounce bullion coin that displays the highest face value ($100) ever to appear on a U.S. coin. The actual melt value of such a coin these days is about $1,600.
Denominations in the astronomical range, on the other hand, tend to belong to the bank notes of nations suffering wild hyperinflation. Weimar Germany might be the most famous example historically, but post-WWII Hungary actually takes the prize among denominations that got out of hand. At one point in 1946, the Hungarian government issued a 100 quadrillion pengo note (100,000 trillion), which is still the record for the highest denomination on any official currency, even beating out Zimbabwe in our time (so far).
Wall Street had an up day on Wednesday as the first quarterly reports trickled in, and investors responded to news of a nominee for Secretary of the Treasury with a shrug. The Dow Jones Industrial Average gained 61.66 points, or 0.46 percent. The S&P 500 was up 0.27 percent and the Nasdaq advanced 0.45 percent.