Outlet centers trending up in the downturn
Baltimore Outlet centers are outperforming other formats in the shopping center industry, as a report by CoStar Property Analytics found that the category has experienced two consecutive quarters of declining vacancies.
According the report, outlet center vacancy hit a high of 5.56% at the end of first quarter 2009. Since then, outlet centers has trended positively and the outlet center vacancy rate now stands at 5.12%, far outshining the 8% to 10% average vacancy rates currently found in the lifestyle, power, community and neighborhood shopping centers categories.
According to a CoStar Property Analytics statistical forecast, outlet center vacancy could return to its lower, pre-recession level of less than 4% by the end of second quarter 2010.
One major contributing factor to this low vacancy is the level of positive net absorption within this category. Outlet center net absorption amounted to 1.1% of the category's total square footage so far this year, which is a much higher level than other shopping center types -- power centers have absorbed .8%, followed by lifestyle centers (.6%), neighborhood centers (-.1%), community centers (-.2%), and malls (-.3%).
The nation's top outlet center landlords are also reporting steady leasing activity and lower vacancy at their outlet centers.