Concessions help keep retail vacancies lower...By Evelyn Lee

Concessions help keep retail vacancies lower
By Evelyn Lee
The overall retail vacancy rate in northern and central New Jersey rose to 8.18 percent in July, up from 6.86 percent in January and 5.21 percent in July 2008, according to a new report from The Goldstein Group, a Paramus-based retail brokerage firm.
But the vacancy rate was still lower than what the firm had projected at the beginning of the year, when the rate was expected to possibly surpass 10 percent, said Chuck Lanyard, Goldstein president.

The lower-than-expected vacancy may be the result of different factors, including landlords providing rent concessions to help retailers stay afloat, he said. Concessions such as free rent and landlords’ contributions to tenant fit-outs have yielded a net effective rental rate that is 15 percent to 20 percent less than deals that were made a year ago, Lanyard said.

Also helping to reduce vacancy was strong activity from independent retailers, health clubs and furniture companies in the past six weeks, he said.

“The general feeling is that the economy is making a turn, and we’re coming out of the recession,” Lanyard said. “Tenants are looking to finish deals so they can open up in early fall and be ready to do Christmas business.”

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