A couple of the more than 2,200 numbers buried deep in this month’s Census Bureau report on retail sales in the national and Philadelphia commercial real estate markets may add to mounting concerns for U.S. shopping mall investors about the growing threat from e-commerce.
The report shows that for the first time, non-store retail sales (including e-commerce sales) in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – totaled more than those for the department stores that anchor most traditional Class B and Class C malls.
This Co-Star report involving U.S. and Philadelphia commercial properties is being made through Philadelphia commercial real estate broker Wolf Commercial Real Estate, a Philadelphia commercial real estate brokerage firm.
Non-store retail sales in February, the most recent month reported, totaled $59.77 billion involving U.S. and Philadelphia commercial real estate listings. E-commerce sales account for about 88 percent of that volume.
The total for general merchandise national and Philadelphia commercial real estate properties housing retailers, the category that includes department stores, totaled $59.74 billion. Ten years ago, general merchandise store sales outpaced non-store sales by 47 percent.
The figures contribute more gust to the intensifying headwinds for shopping mall investors in the U.S. commercial real estate market – including Philly office space, Philly retail space and Philly industrial space – whether they are property owners, lenders or real estate investment trust and commercial mortgage investors.
“Class B and C malls in particular are driving weaker loan performance as they generally have less favorable locations, weaker anchor profiles and are particularly vulnerable to competition, both from other malls and internet sales,” Fitch analysts said in a recent report. “Losses of foot traffic and sales have led to additional store closures with increasing mall vacancies affecting property-level cash flow, thus putting pressure on loan performance.”
Overall, there have been more than 5,800 store closings reported this year among national and Philadelphia commercial real estate listings. That elevated level of closings could lead to a widening gap in performance between property owners with more Class A malls than those with more Class B and Class C malls, Morgan Stanley & Co. analysts reported this week in their outlook for upcoming REIT first quarter earnings results.
For more information about Philly office space, Philly retail space, and Philly industrial space or other Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) at Wolf Commercial Real Estate, a leading Philadelphia commercial real estate broker that specializes in Philly office space, Philly retail space and Philly industrial space.
Wolf Commercial Real Estate, a full-service CORFAC International brokerage and advisory firm, is a premier Philadelphia commercial real estate brokerage firm that provides a full range of Philadelphia commercial real estate listings and services, property management services, and marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.
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As experts in Philadelphia commercial real estate listings and services, the team at our Philadelphia commercial real estate brokerage firm provides ongoing detailed information about Philadelphia commercial properties to our clients and prospects to help them achieve their real estate goals. If you are looking for Philly office space, Philly retail space or Philly industrial space for sale or lease, Wolf Commercial Real Estate is the Philadelphia commercial real estate broker you need – a strategic partner who is fully invested in your long-term growth and success.
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