The calendar pages flip, but the mood remains the same.
As the ICSC Spring Convention kicked off yesterday traffic at the Trade Expo was brisk (and the evening cocktail party circuit was hopping) and retail real estate professionals all preached optimism about the state of the industry.
“Retail is rocking,” says Tom Buxton, president and CEO of Buxton Co. And that means business is very good for Buxton Co. Buxton estimated his firm had between 800 and 900 appointments scheduled and more than 400 people confirmed for an event it will be holding Monday at the Bellagio to unveil a new service. (See Heard on the Floor below for more.)
One big shift Buxton sees is that retailers have become much more savvy about how they are handling expansion, which is part of why he sees a continued upside for the industry.
“In the past retailers were reactive to developers,” Buxton says. “Now they are really being proactive. They are doing research and finding sites where they know for a fact that will succeed and they’ll build a store whether a developer is building a project or not. They’ll go stand alone if they have to. It’s because they understand their customer better today.”
Eric Lutz, principal of Farmington Hills, Mich.-based Lutz Real Estate Investments, who has some concerns after April’s largest-ever drop in same-store sales, thinks there will still be enough interest in retail properties and opportunities for new developments in infill locations to make up for any slide in retail demand. “There is still a sense of retail real estate being safer than office, because so many retailers are strong, credit A tenants and just the fact that so many retail centers are being created spurs further investment,” Lutz notes.
Robert J. Tindall, principal and president of Seattle, Wash.-based architecture and planning firm Callison, however, says he is at least a little nervous. There is a big question mark in everyone’s mind about whether the economy will drop in 2007. “We’ve all been there before, so we want to be ready, but as always, in a downturn, the better retailers and better developers will come out on top,” Tindall says.