After a rough few months that saw the credit markets seize, a slowdown in investment sales and what was forecast to be a lackluster holiday shopping season, the buzzword at ICSC's New York National Conference and Dealmaking was “uncertainty.”

Although the three-day conference boasted a record attendance of 8,500 registrants, there was a palpable feeling of caution in the air and a notable lack of consensus on the industry's outlook. The most pessimistic observers used the dreaded “r” word — recession. A few said the industry would rebound quickly and things would return to full speed by this summer. However, most retailers, investors, brokers and developers speculated it would fall somewhere between the two extremes.

Investors said the changes in the debt market have altered the playing field. There are fewer bidders for projects. Pricing spreads based on asset quality and location are getting worked back into the market as highly leveraged buyers who had been driving the market have disappeared. But not everyone is pulling back.

Coyote Management L.P., which currently owns two regional malls, expects to close on another deal any day now and has two more acquisitions close to fruition. By mid-2008, the Addison, Texas-based mall owner could have as many as seven properties.

However, an expected source of investment — overseas investors with increased buying power caused by the weak dollar — may not materialize as some have predicted. “Real estate investors are not currency speculators,” says Richard W. Bloxam, international director with the European retail capital markets group of Jones Lang LaSalle. “If they benefit from the weakened dollar, it's a bonus, not the reason they'd buy more property.” Bloxam expects European investors to pursue opportunities in growth markets within Eastern Europe, China and India.

On the construction front, lenders are presenting developers with tougher underwriting standards, making it difficult to secure financing for speculative projects. To get funding, developers say they need higher pre-leasing levels. Further, developers pursuing mixed-use projects with residential components are finding they need to switch from building condos to rental units.

Then, there is an expectation that a slow holiday season could be the death knell for more retailers. The past few years have been marked by low numbers of bankruptcies and store closings. But that could soon change. Pier 1 Imports, which has increased the number of announced store closings and job cuts and shed some of its businesses, continues hemorrhaging cash. And the plight of Bombay Co. illustrates how quickly retailers' fortunes can change. The firm was still opening new stores as recently as this fall (in spite of flagging sales). But it went from Chapter 11 bankruptcy protection to liquidation in a matter of months.

“We are expecting more store closures,” says Andy Graiser, co-president of DJM Realty, a Melville, N.Y.-based real estate consulting and advisory firm that specializes in disposition and restructuring of troubled retailers. DJM was shopping Bombay's 333 locations at the ICSC Dealmaking conference. “There's a lot less dealmaking being done at this conference — we're hearing that from landlords and from tenants. Graiser says, “I'm not sure we'll see many more bankruptcies — just healthy retailers doing housecleaning and being proactive about their space.”