Mattress Bathtub & Past’s current chapter submitting will not be anticipated to impression retail landlords very a lot, as many have lined up tenants lengthy earlier than Mattress Bathtub & Past really filed its paperwork. However it should have ripple results elsewhere, together with in some industrial markets, in keeping with CoStar Group’s Might 2023 actual property report.
Mattress Bathtub & Past leased 6.1 million sq. ft of distribution facilities all through the nation, most of which in massive, fashionable facilities constructed after 2005. About half already are marketed for lease on CoStar.
CoStar believes that a few of these distribution places will fare higher than others and entice new tenants. The reason being that there are solely three different present or beneath development distribution facilities with area measuring 500,000 sq. ft or higher, additionally constructed after 2000 and inside a one-hour drive of Mattress Bathtub & Past’s largest Las Vegas distribution heart. In distinction, its heart inside the Dallas-Fort Value metro market has virtually 50 such accessible distribution areas inside a one-hour drive.
On the identical time, a number of different huge chains comparable to T.J. Maxx, HomeGoods and Ross Shops have grabbed up a few of Mattress Bathtub & Past’s shops, which might necessitate their demand for extra distribution facilities down the street.
In the meantime, whereas Mattress Bathtub & Past’s retailer closures gained’t have that a lot of an impression on landlords, that isn’t to say that retail itself hasn’t skilled some setbacks within the first quarter, in keeping with CoStar.
Within the first quarter, leasing quantity for the retail sector slowed by 2% when evaluating quarters and 26% in evaluating yr to yr exercise, because of the unsure financial system and absence of obtainable areas. Altogether, retail tenants occupied 13.2 million sq. ft on a internet foundation, which accounted for transfer outs. This represented the slowest stage since 2020 however the ninth consecutive quarters of internet demand development.
Retail property gross sales additionally fell—by 40% quarter to quarter and virtually 50% yr over yr on account of increased rates of interest affecting deal move adversely. Falling costs haven’t declined sufficient to encourage traders to step in.
