"The next two years will be problems for some, opportunities for others," said session co-chairman Martin Mayer, president and CEO of Stirling Properties, based in Covington, LA.
The industry is still fairly early into the retail shakeout, as consumers are just beginning to change their shopping habits, said Kenneth Bernstein, president of Acadia Realty Trust, based in White Plains, NY. More retailer bankruptcies will follow, with a consequent rise in store closings. Mayer noted that ICSC has predicted 6,000 stores will go dark in 2008, the highest number since 2001. But that isn't the real problem.
"[The challenge] is being able to fill vacant spaces," said Richard Tucker, president and CEO of Tucker Development Corp., based in Highland Park, IL. "Fewer tenants are expanding."
Those closures will affect various property types differently. Trophy malls are expected to weather the current situation well, but open-air projects vary.
"I, of course, think the grocery-anchored centers will do wonderfully," said Shelly Sponholz, SVP with Giant Eagle, based in Pittsburgh. "They will still be a mainstay of American retail."
Poorly conceived lifestyle and town centers, however, will have problems, as empty stores prove to be difficult to retrofit, Bernstein said.
"C-quality malls and C-quality power centers will run into co-tenancy issues," said Jeff Olson, CEO of Miami-based Equity One.
Some, however, remain optimistic. Session co-chairman Daniel B. Hurwitz, president and COO of Developers Diversified Realty, Cleveland, predicted that the downturn will reverse in just eight months. "One day, we'll wake up and find out we've been in a recession for four or five months," he said. "And we're almost out of it."
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