Commercial property leasing demand weakened further in January, according to Boxwood Means Inc.'s monthly small-cap real estate market report.
Days on Market (DOM), the Stamford, Conn.-based firm's proxy for underlying leasing demand, rose to new highs for all property types during the month. After an 8% month-over-month increase in DOM, shopping centers are now averaging 216 days of marketing until lease closing, Boxwood says. Retail's DOM rose 4% to 189, while office and industrial averaged 182 days and 175 days, respectively.
‘Clearly, securing space users for multi-tenant properties remains elusive for landlords at this stage of the economic recovery,’ the report states.
Boxwood's report does include a silver lining, as the firm observed a flattening of the trajectory of monthly rent losses. January's retail rents declined 48 basis points – the smallest monthly loss since October 2008. Shopping-center rents dropped 51 basis points in January.
Boxwood notes that consumer spending, while having increased in the last half year, has "yet to juice up retail sales or demand for retail space."
SOURCE: Boxwood Means Inc.
