Occupancy rates at shopping centers and malls were 92.7% in Q4, the highest level since 2008. Malls (both super-regional and regional malls) saw occupancy rates of 94.2% at the end of 2014, the highest since Q4 1987, according to a report by the International Council of Shopping Centers and the National Council of Real Estate Investment Fiduciaries.
Rents rose 6.5% year over year in 2014, the third gain in three years and the strongest level since 2008. For the malls alone, base rents rose 17.2% in 2014, the strongest since tracking started in 2000, and 15.3% just in Q4 year over year, the fifth straight quarter with a gain in double digits, the report found.
Net operating income is also up in the overall category and the mall segment. NOI at shopping centers rose 8.3% in 2014 ($16.79 per square foot). And NOI at malls rose 17.5% in Q4 compared to a year ago, the fifth straight quarter with a double-digit gain, and increased 21.3% in 2014 to $28.62 per square foot. In 2014 mall sales productivity was an annualized $475 per square foot, up steadily every year from $383 in 2009.
The demise of the American mall may be exaggerated, at least according to these numbers. Certainly the economy is helping, and retailers and malls have been working to attract and keep visitors. Still, the work for many malls isn’t over; other studies show that many need attention to their retail mix and their approach and could benefit from technology that helps bring customers in and keep them engaged.