In April, downtown pedestrian traffic in the U.S. was about 25 percent less than during the same month in 2019, real estate software provider MRI Springboard reported.
The lower figure represents the loss of commuters, as we have detailed in a series of articles including:
● “Commercial Real Estate in a Tailspin” (20 Oct 2020)
● “Deloitte Abandons More London Office Space” (26 Apr 2022)
● “GM Softens Back-to-the-Office Requirement After Worker Backlash”(4 Oct 2022)
● “New York City’s Workforce Sharply Shrinking” (24 Jan 2023)
● “Office Occupancy Half of What It Used to Be” (7 Feb 2023)
● “Study: One Billion Square Feet of U.S. Office Space Will Be Empty by 2030” (28 Feb 2023)
The flight has been particularly dramatic in centers of old-line business centers such as Manhattan and San Francisco, where upscale clothier Nordstrom’s just closed two stores.
“We’re in for quite a challenging time for retail in downtowns,” MRI Springboard’s marketing director Diane Wehrle told The Wall Street Journal.
In contrast, suburban shopping centers have seen a resurgence as more workers are home-based, the WSJ noted.
Inflation and high interest rates have not deterred retailers’ interest in suburban storefronts this year, according to the WSJ.
Site Centers reported record leasing and occupancy rates in its suburban shopping centers so far this year. Retail Opportunity Investments, another shopping center owner, says its properties are 98-percent leased.
Simon Property Group, the largest owner of U.S. malls, reported occupancy of 94.4 percent in this year’s first quarter, almost as much as in 2019.
In contrast, available retail space downtown exceeded that in suburbia in last year’s second half for the first time since 2013.
“You’re seeing retailers of all types go to these suburban centers,” analyst Dana Telsey at Telsey Advisory Group said to the WSJ.
Dig, a chain of casual restaurants in Boston, New York, and Philadelphia, has been closing sites downtown and opening new ones in suburbs and residential areas of cities instead of office districts.
“There’s a permanent part of the work base that’s never going to return to the office five days a week,” Dig CEO Tracy Kim told the WSJ. “We just want to be where the mouths are.”
TREND FORECAST: Not a word from the mainstream media Presstitutes—media whores who get paid to put out by their corporate pimps and government whoremasters—of the socio-economic damage that has been inflicted upon humanity by politicians who locked down much of the world to fight the COVID War.
As anchor stores such as Kohl’s and Bed, Bath, and Beyond abandoned their mall spaces, landlords will start bullshitting that they leased the spaces to pickleball courts, animal shelters, and other enterprises that will do next to nothing to bring in the revenue they need to prevent them from defaulting on their loans.
And, again, the higher interest rates rise (which they have, going from near zero to 5.25 percent), with floating loans, landlords will be paying more to service their loans as revenue sharply declines… which equals “defaults.”