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Retail: Single-Tenant Deal Flow Sees Smallest Decline

ELMWOOD PARK, NJ-Retail spending in New Jersey is contracting for the first time since 1991, creating hardships for both tenants and retail property owners.

By Alyson Grala | Updated on October 05, 2009

ELMWOOD PARK, NJ-The most drastic declines in retail space demand have been recorded in low-density outlying locations and urban areas with lower household incomes and sizable job losses, according to a recently released third quarter retail report from Marcus & Millichap Real Estate Investment Services.

In East Orange and Irvington, for example, mom-and-pop retailers have been hit hard, and many are closing, contributing to vacancy in Essex County surging 210 basis points year-over-year and effective rents retreating 7.6%. Meanwhile, statewide inventory expansion of 1.9% this year will pressure key measures of property performance, such as vacancy.

Still, the report noted that some areas of the state are weathering the downturn better than others. In Passaic, North Bergen and North Middlesex counties, higher incomes and rent reductions have kept vacancy below 5%. Additionally, in Northern and Central New Jersey, Walgreens has leased some of the space vacated by Drug Fair, while P.C. Richard & Son has taken over several former Circuit City locations.

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