Before the pandemic, the biggest uncertainty in the commercial real estate market was the renovation of indoor malls. Shopping centers have been losing popularity for years and many have already been converted into other asset classes. Research by CoStar shows that these properties are prime candidates for redevelopment due to the rapidly rising vacancy rates, which are expected to continue to rise this year.
Shopping center vacancy rates have dropped 150 basis points over the past year and CoStar expects to drop an additional 170 basis points in 2021 with large groups of people, ”Robin Trantham, senior consultant at CoStar Advisory Services, told GlobeSt.com. "Given that most traditional malls across the country are closed, foot traffic to malls dropped dramatically during the height of the pandemic."
