It's been a rocky nine months with the credit crunch having deep impacts on investment and development and pressures on consumers cutting into retail sales. Yet industry executives at last month's ICSC's RECon remained optimistic about the sector's future. Few took a bearish stance to the conference. Developers, managers and owners are reporting healthy deal-making volume.
Overall, attendance at the show was close to last year's levels, according to the ICSC. There were nearly 43,000 preregistrations — almost the same as last year. Nearly 48,000 attended in 2007. However, many attendees said they shortened their trip this year. Many arrived Monday morning and left Tuesday evening rather than staying for the full four days of the conference.
“We're in a correction, not a recession,” says Greg Maloney, CEO and president of Atlanta-based Jones Lang LaSalle. “Retailers are doing deals. Maybe it's not as many as a year ago and they are being more selective. But they are active.” That's kept Jones Lang LaSalle busy and Maloney says he's been happy with the way things have played out, especially since there was a lot of uncertainty and pessimism heading into the show.
Furthermore, many of the deal negotiations going on are for projects opening in 2009 or later, according to Doug Healey, senior vice president of leasing for Santa Monica, Calif.-based Macerich. “Our 2008 deals are done. We're talking about 2009, 2010 and even 2011. That's a long way out…. What we're seeing today is just a hiccup.”
One of the biggest changes in the market is that leasing negotiations are taking a bit longer, according to Gary A. Glick, a lawyer with Cox Castle Nicholson LLP, a Los Angeles-based commercial real estate law firm. “Tenants are concerned about co-tenancy and it's very hard to get them to commit to open within the next few cycles,” he says. “A lot of them are saying ‘I don't want to open until 2010, 2011.’”