According to an article in the Dallas Morning News , retail occupancy fell this year to 87 percent due to store closings and retail bankruptcies.
The article said:
“Overall retail building and shopping center occupancy was at 87 percent at the end of June – down from 87.6 percent at the start of the year, Dallas-based Weitzman Group said Wednesday.
The real estate firm said much of the decline in occupancy was due to closings of more than two dozen Circuit City and Linens ‘n Things stores in North Texas.”
Also, developers are adding an additional 3 million square feet of retail space despite the occupancy decline and retail bankruptcies. Most of the new retail space was already in development before the recession caused a string of store closings and bankruptcies. With nearly 15 percent of Dallas-Fort Worth retail space empty we may see a surge in foreclosures and commercial real estate bankruptcies by 2010. Already, many commercial properties are facing downward pressure on prices due to the excess space available to companies who are also trying to trim costs and avoid bankruptcy. Some analysts are even suggesting the “death” of the mall/shopping center or at least a serious decline. If the number of commercial property foreclosures and retail store bankruptcies continue to rise we may discover some truth in that statement.