Retail real estate survived the most trying year in its history. But there's still plenty to worry about. There will be no return to business as usual — at least not the way things functioned toward the tail end of the boom.
By the end of the run, things had gotten too easy. Property values rose so quickly for so long that for many investors this business became about flipping properties. They borrowed huge sums of money cheaply, collected property income for a bit and then quickly moved to sell for a profit before ever having towith the balloon payments at the ends of their loans. The returns on equity were juicy.
Amid all that, operations didn't matter as much for some owners. Tenants were lining up to take new space in an environment where consumers spent money hand over fist. Centers were flush with tenants. Having strong management was less important. You did not have to go on the prowl for tenants. You did not have to worry about bringing in traffic and driving sales.
All that is gone now. The credit markets are recovering, but it may be a very long time — if ever — before we see the overly generous conditions that marked the end of the boom. Lenders, even if they loosen their purse strings, are bound to be more stringent.
And tenants are no longer knocking down landlords' doors. Consumers have become stingy. Those owners that succeed will be the experts at property management and on delivering value to their tenants. Beyond that, the rise of smartphones and other technologies promises to alter the shopping landscape in ways that Internet retailing alone never could. (See our take on what a future mall trip might look like starting on p. 20.)
In that vein, Retail Traffic too must change. We will put more emphasis on analyzing strategy and tactics, especially when it comes to what the most innovative owners and managers are doing to survive.
The way we deliver that information has changed as well. We are no longer simply a print publication. There is a real need for timelyand analysis. And there is content and information that is better shared online.
Our strategy will continue to evolve. For now, however, the way we're adapting is by turning the print magazine into a bi-monthy publication. The emphasis in the print issues will be on analysis, case studies and thought pieces. We've cut down our news section to be a collection of briefs on the biggest stories in the industry in the past 60 days to create more space for our features. In addition, this month marks the debut of what will be an expanding section — the Tenant's Perspective. Here, we will look at retailers' real estate and expansion strategies and examine key trends among tenants that owners need to know about.
Beyond print, we are continuing to grow online. Our Web site — retailtrafficmag.com — is already updated daily with news, features, deal coverage, exclusive charts, Webinars and a blog. Look for all of that to expand. And we're trying our hands at the social media game with our own Facebook page, Twitter feed and LinkedIn group. For more on our offerings and a taste of recent features, go to page 8.
The world is changing and no one has figured out what it will look like. We intend to chart the course.