As the time for the 2009 ICSC RECon show draws near, it's becoming clear this year's conference will be a far cry from the lavish events of recent years. Forget massive delegations, decadent parties and endless networking. How will it look? This convention will be a lot more reminiscent of 2001 than 2007, says Greg Maloney, president and CEO of Jones Lang LaSalle Retail (JLL), an Atlanta-based firm with a 169-million-square-foot global retail portfolio under management.
With retailers in a contraction mode, newvirtually nonexistent and investment sales at a standstill, the sense of smaller scale at this year's RECon will be physically palpable. According to ICSC's preliminary tallies, there have been 20,000 pre-registrations so far — down about 15 percent compared to 2008. Overall, including on-site registrations, 40,698 people attended the show last year. Booth space at the conference will be down by about 15 percent as well.
In the biggest change, some major players, including Australian listed property trust the Westfield Group and U.S. REIT Simon Property Group, will be missing from the Leasing Mall at the Las Vegas Convention Center. The firms plan to attend the conference, but neither has registered for a booth. Both intend to operate suites out of nearby hotels. Meanwhile, JLL will take over Westfield's former space at C 1001 10th Avenue.
There will be fewer parties and a lot more focus on business this year, in particular, preliminary talks with retailers about their plans for 2010. PREIT, a prominent player in the mall REIT sector, has cancelled its annual party at the Hard Rock Cafe, which would regularly attract more than 400 people. The firm also plans to send half as many employees to the conference in 2009 as in 2008, when 45 PREIT representatives attended the event. Urban Retail Properties, a-based property manager, called off its Monday night cocktail reception. The firm plans to send no more than two dozen people to RECon this spring. And these changes don't even begin to reflect the cost-cutting measures at some of the smaller firms.
Anticipating slower activity, ICSC has also cut down the convention's hours, opting to close the Leasing Mall at 1 p.m. on Wednesday, May 20 rather than at 5 p.m., giving attendees the opportunity to break down booths and fly home earlier than usual.
Many industry insiders, however, say that's just as well — in the past few years, RECon had become a self-indulgent affair, with too much schmoozing and not enough focus on transactions. Attendance may be down this year, but those who'll make the trip to Las Vegas in 2009 are more likely to be real decision makers — partners, executive committee members, top leasing— making meetings more productive, according to Sarah Benson, director of marketing with Casto, a Columbus, Ohio-based developer. That will be a departure from the peak of the real estate boom, when firms would all but take their entire crew to the convention.
“We were always competing [with other firms] from the party standpoint,” adds Maloney, whose firms holds an annual party at the Palms. This year, “we scaled back the number of people we are inviting. We are just concentrating on our clients and retailers.”
JLL will also send fewer of its employees to the convention in 2009 — only those who can benefit from face-to-face meetings with clients will attend the conference. This back-to-business attitude is being echoed throughout the industry, as retail real estate professionals try to make attendance less expensive and more productive for their bottom line.
Steiner + Associates, a Columbus,Ohio-based retail developer, plans to send the same number of people to the convention this year as last. Steiner is on the smaller side, so it only sent 11 employees to Las Vegas in 2008, including seven leasing representatives and three executives. But the firm decided to remake its regular Sunday night party at the Bellagio into a cocktail reception at its booth.
Steiner's executive vice president Beau Arnason expects to sit through a fair number of meetings with retailers, but he notes their plans for 2010 are likely to remain tentative. “It's been widely reported that a lot of tenants' capital has not been freed up yet, but it doesn't mean they don't want to pin down their prime locations,” Arnason notes. “That's why we are still seeing heavy activity in terms of setting up pre-meetings.”
And for those firms that still have cash reserves, RECon might prove a good place to survey buying opportunities for the future. For the past year,sales in the retail sector have remained at a trickle, as financing became more scarce and sellers refused to accept lower bids. With more owners facing upcoming debt maturities, however, that might be about to change.
“We will be keeping an eye out for properties with good value that would fit in our portfolio because we have the resources,” says a spokesman for the Cafaro Co., a Youngstown, Ohio-based privately held retail owner with a 32-million-square-foot portfolio. “We are open to the idea of possible acquisitions.”
Cafaro, which for several years has been building up its cash reserves, plans to bring the same number of people to the show as last year, taking space at the same lavish booth at N 20 A Street.