With the number of national retail chains seeking bankruptcy protection growing this year, landlords are facing a very limited field of new tenants. Although retail executives put a brave face on their predicament, all agree that the poison cocktail of deepening recession and the international banking crisis has placed the entire shopping center industry on shaky footing.

“We're in a new world, a new economy,” says Michael Wiener, president and CEO of Excess Space Retail Services, which specializes in lease restructuring and disposition. It is a business that thrives in uncertain environments.

“We have been growing exponentially right now, in terms of dispositions,” says Wiener, who adds that the Lake Success, N.Y. firm's workload could grow by 50% over the next year.

Industry analysts say the current holiday shopping season will be the best stethoscope for the ailing retail market. “People are holding their breath, waiting to see how the Christmas season goes,” says Erin England, brokerage director for Colliers Keenan Retail Services Group in Charleston, S.C.

Meanwhile, retail experts continue to seek new tenants for empty stores amid a largely barren landscape. Matthew Bordwin, a managing director for KPMG Corporate Finance, says that growing chains traditionally assume the leases of multiple locations from a dying retailer, but that remedy may not work this time around. “Nobody in the current market is in an expansion mode,” he says. “Firms that formerly planned on expanding 10, 20 or 50 stores may be looking at only one or two.”

One possible solution is that retailers who have been waiting to jump into Class-A and B space could fill the empty locations, says Wiener. But even landlords in trouble may look askance at the possibility of filling up a vacant Circuit City with a 99 Cent Store or a Big Lots. As Bordwin points out, “They're afraid of looking back in three years and asking, ‘What have I done?’”

The most resourceful brokers have been able to find non-retail tenants for large footprints that have gone dark. Call centers have been willing to occupy former store buildings. Some landlords may even divide space for medical office tenants, especially in the case of hard-to-rent second stories.

England was able to fill a vacant Circuit City in Columbia, S.C. with a light manufacturing operation. That deal, however, took place prior both to the international banking meltdown of September and Circuit City's bankruptcy filing in November. England says he's no longer sure a similar deal could be easily repeated today. “It was a different market and a different time,” he cautions.

Meanwhile, one group that remains adaptable as ever are brokers themselves. “They've all become specialists in lease dispositions,” Bordwin says wryly, “because that's the only kind of work that's out there.”