Barclay Properties Group, Inc

WANTS VS. NEEDS SHAPE RETAIL OUTLOOK

Nov 25, 2008 2:12 PM, By Matt Hudgins
To adulterate a Rolling Stones lyric, consumers can't always get what they want, but they just might buy what they need. That characteristic of economic down-cycles explains why some retailers - and their landlords - will perform better than their neighbors this winter as the nation gropes its way through what is expected to be several quarters of recession.

Retail performance in the near term will be bifurcated between stores that cater to discretionary spending and those that sell basic necessities, according to a report published today by Colliers International, a global real estate services firm. "For the near term, retail sales will be divided between these two very different camps," contends Ross Moore, Colliers' executive vice president of market and economic research. "Discretionary spending will be characterized by declining sales and store closures," Moore writes in the company's biannual Retail Real Estate Report. "Low-end retailers and discount retailers, however, continue to make steady gains."

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BLEAK OUTLOOK FOR RETAIL REAL ESTATE: 2009 - 2010

By David Bodamer
Hoping for a quick turnaround in the retail real estate sector? Don't bet on it. That's, at least, the opinion of more than 700 commercial real estate experts surveyed for the Urban Land Institute's and PricewaterhouseCoopers' annual Emerging Trends in Real Estate report.

"We've all got to pray for retail," said Jonathan Miller, a consultant with Urban Land Institute and the report's principal author during a Tuesday presentation of the report's findings. "It's had a great run. But it's in for a tough time. ...Class-B and -C malls will lose stores as chains consolidate into better malls. It's going to be ugly."

In judging prospects for property types in 2009, respondents ranked retail only above for-sale housing. On a scale of 1 to 9 with 9 being excellent and 1 being abysmal, retail came in with a 4.26 rating as an investment option and a 3.95 rating as a development option. Among 11 sub-sectors, regional malls ranked last (3.89 investment, 3.11 development), power centers ranked tenth (4.06 investment, 3.50 development) and neighborhood and community centers ranked sixth (4.67 investment, 4.08 development).

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