Retailers’ sentimental leasing activity remains strong. Comp Center NIO, excluding lease cancellation income was up a solid 8.2% for the quarter. NOI growth was driven by rents and recoveries. Sponsorship income also contributed.
As you’ll recall, we reported a 9.3% increase in the first quarter, so it’s been two periods of outstanding growth. With this performance, we are raising our guidance on NIO growth to a range of 5% to 6% for the year. That’s up significantly from the 4% outlook that we communicated last quarter. This means we continue to expect NOI growth to moderate in the second half of the year.
While rent is projected as consistently good quarter-over-quarter growth throughout the year, we expect volatility and seasonality of net recoveries to reduce comparable NOI growth in the next two quarters.
On June 30, occupancy at comp centers was 90.2%. In addition, we had 4.1% occupancy in temporary tenants at comp centers, our highest level in the second quarter we’ve seen since we began tracking the statistic. This raised our total occupied space to 94.3% at June 30.
Comp center occupancy was up 200 basis points from June 30 last year and better than anticipated for this quarter. This is largely due to an unprecedented low level of unscheduled closings we’ve had to-date in 2012. Only one tenant with four stores declared bankruptcy in the quarter. We continue to believe that occupancy will be up about 150 basis points over 2011 for the rest of the year. Of course, strong occupancy favorably impacted both rent and recoveries in the quarter.
Average rent per square foot of $47.07 was up a healthy 3.8% from last year. Year-to-date average rent was up 2.7%. We continue to believe we’ll achieve our guidance of 3% rent per square foot growth for the year.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV