Survey: Strong economy has propelled Fort Wayne’s retail vacancy rate to its lowest level in many years
The strong economy has caused the vacancy rate for retail space in Fort Wayne to decrease for the third year in a row, according to a new survey by the Zacher Co.
According to the local real estate firm’s 2018 report — which was compiled before several recently announced closings — the overall vacancy rate in May was 11.1 percent compared to 12.9 percent in 2017. The May rate was the lowest recorded since Zacher began tracking market statistics in 2009 but does not include the closing of the 122,000-square-foot Carson’s store in Glenbrook Square or closing of Toys R Us and Babies R Us Glenbrook Commons and on Coldwater Road.
In 2011 Fort Wayne had 18 vacant big-box stores totaling 992,000 square feet.
“Today there are nine vacant retail big boxes (20,000 sq. ft. or greater) totaling 372,000 square feet, which is 176,000 less than the total in June 2017. This is the fewest number of big box spaces and smallest total square footage since we began tracking big box vacancy,” the report noted. “With the possible exception of department stores, the store closings, especially for big box retailers, has largely been sorted out over the past five years, which is reflected in our 2018 statistic.” Every quadrant saw an increase in occupancy, the report noted.
Fort Wayne’s retail inventory totals about 14.007 million square feet, with about 1.56 million square feet vacant. The retail vacancy rate was 3.9 percent northwest, 16.1 percent northeast, 8.1 percent southwest, 35.8 percent southeast and 47 percent downtown, due in part to recent construction of additional space.
Zacher expects downtown growth to continue, thanks in part to projects already announced or underway. “Both Meijer and Kroger have purchased sites for new stores on Dupont Road east of I-69, but the timing for construction of either project is undetermined,” the report notes. “Nationally retailers are continuing to close stores as they feel the fallout from decades of overbuilding and the rise of online shopping. We could see this trend impacting the Fort Wayne market. Discount retailers will continue to open new locations while traditional department stores are struggling. Lease rates are continuing to increase for the most attractive locations, such as downtown, near Glenbrook, Jefferson Pointe and the Dupont Road corridor between Coldwater and Tonkel roads.”
But the report also said there could be “continued downward pressure on vacant larger spaces, especially in secondary locations. We believe there will be more department store closings, but the timing is undetermined . . . (but) with all the disruption in the retail sector in recent years and the rise of online shopping we are reminded that 91 percent of retail sales are still via traditional brick and mortar stores. With consumer confidence high, unemployment low and wages growing, there is every reason to believe that retail sales and consequently the Fort Wayne retail market will be robust throughout the year.”
“Fort Wayne never really had a glut overbuilding like other areas did,” said company President Steve Zacher, who helped prepare the report.