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And when walking through the Las Vegas Convention Center during ICSC's RECon in May, don't expect endless bottles of water or platters of cookies and other goodies to be sitting out. Those freebies will be a rare sight this year as companies aim to massively trim expenditures. Booths will be stripped to the bone and staffed accordingly.
Those are some examples of the new frugal strategies retail real estate firms have adopted in these harrowing times.
Cutbacks seem to be coming in many forms. Some firms have reduced operating hours at properties to save on labor and utilities costs. Others are taking new steps to more aggressively manage energy consumption, such as turning off interior lights when natural lighting can illuminate spaces. Some are also using more energy-efficient bulbs. Similarly, owners and managers, through use of special software and other technologies, are tinkering with thermostats on heating and cooling systems to make sure they are not running unnecessarily during nonpeak hours.
Unfortunately, firms are making more painful cuts as well. Suddenly, layoffs are mounting at many firms. We know about the cuts that the public REITs have announced. But there are also many examples of private firms cutting back. Only they don't have to put out a press release when they're doing it. Companies especially are cutting back on development pros with the expectation that it might be a while-even a decade — before the industry is in full-fledged expansion mode again. As a sign of the times, ICSC will operate a “Reconnect Pavilion” at the conference — a place “dedicated to providing information on continuing education, essentials of retaining and gaining employment, professional development and other career-enhancing tools.”
And that raises the biggest question of all. No one seems quite sure what to expect from RECon — the high point of the industry calendar. We've grown accustomed to seeing decked out booths and lavish cocktail parties as firms competed to land the hottest night spots. This year, the nights look to be a lot quieter. And firms are planning to attend the show for shorter stretches. We've even heard that some major firms are planning to make it a one-day affair.
Rumors are also swirling about how much the show will be reduced. Attendance will surely be down, but by how much? Judging by hotel prices, there's a lot of space still available. The leasing mall reportedly will be scaled back to two halls this year — down from the three that the show inhabited for the past two years. And there are whispers that some major companies have decided to forego the convention center entirely this year and instead will operate out of suites at nearby hotels.
Nonetheless, the show will fulfill one of its usual missions. It typically is a great barometer for the mood of the industry. That promises to remain true this year. The one problem is that no one may like what they're going to hear.