Small-cap market fundamentals remained generally weak in December, with rents falling for all major property types, according to data provider Boxwood Means.
Shopping centers, however, ‘may still be inching along a dimly lit path to recovery,’ the firm notes in its monthly small-cap update. Decreases in shopping-center rents have flattened out, with December losses of 49 basis points (bps). According to Boxwood's days-on-market metric, the elapsed marketing time for shopping-center space has narrowed by 6.5% nationally over the last half year to an average of 200 days.
While office-rent losses similarly eased 49 bps in December, the velocity of rent decline (-1.37% since October) is accelerating.
‘This sobering trend reflects the necessity of landlords to lower rents at this advanced stage of the real estate cycle in order to compete for scarce tenants,’ the Boxwood report says. The days-on-market metric for this propertry type increased 3.4% to 182 days on average over the past six months.
The company further notes that 2009 was an awful year for the small-cap industrial sector, as rents fell 0.73% in December and 8.08% for the full year.
SOURCE: Boxwood Means