This is the eighth annual study of the performance of Shopping Centers: their sizes vacancy and, rents and CAM charges in the Greater Harrisburg, PA (Capitol Region). The Region’s submarkets are defined as the Susquehanna River’s East Shore (Dauphin County) and West Shore (Cumberland County). The scope of the investigation includes all Centers over 18,000 square feet with categories based on the classifications provided by the International Council of Shopping Centers (I.C.S.C.).
No new Shopping Centers opened this year. The total remains at 79.

Like the 2005 study, vacancy, rents and common area maintenance charges have remained virtually unchanged. Unlike 2005 the rise in space has been small. Furthermore, it was offset by a similar rise in vacancy.

CAPITOL REGION: Overall, the inventory has increased less than 1% or about 27,000 square feet. Vacancy has risen from 5.6% to 5.7% or about 42,560 square feet.
This works out to a negative absorption of about 15,500 square feet.
In the last 2 years, a total of about 1.62 million square feet was absorbed. This pace of expansion could not be sustained in a market of this size.

WEST SHORE: There was a minute rise in the supply. But, there was a similar rise in vacancy.

EAST SHORE: In 2006, inventory was added to the other measures, as the same.
So, here supply and demand in retail properties now appear to be balanced. A large Community Center expected to open in 2007, may upset the balance.

SUMMARY: In 2006, the Region experienced a very small rise in inventory. It was created in the West Shore Submarket. But, both submarkets had little increase in vacancy. The result was minor but, negative absorption of 15,500 square feet.
The industry has stood still this year. But, when you average last 5 years, the growth has been substantial and positive.
Though there has been a dip in expansion this year, the average of the last 5 years has been robust. New properties scheduled to open in 2007 will bring leasing of retail space to a new level.
The outlook is for continuing vitality in the Shopping Center Industry of the Capitol Region.

Richard H. Moore, Chairman Retail Committee