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ICSC Panelists Urge Cooperation

KISSIMMEE, FL-Landlords are advised to work with tenants to prevent further erosion of occupancy and rents.

By Carl Cronan | Updated on August 18, 2008

KISSIMMEE, FL-Retail landlords should work with their tenants to avoid trouble that could lead to higher vacancies during the ongoing economic downturn, panelists advised audience members during the International Council of Shopping Centers’ 2008 Florida Conference. Although Florida’s retail market remains one of the nation’s strongest and is still favored by merchants and tenants alike, experts warn that occupancy and rental rates have already fallen two percentage points in the past year alone.

“A store occupied is still better than one unoccupied, even at half the rent,” said Stanley Tate, president of Tate Enterprises in North Miami and an advisor to the Federal Reserve. Tate also warned of the prospect of 85 additional bank failures nationwide over the next 30 days, further eroding the ability of retail property investors to obtain financing in the current credit crunch.

Tate also predicts that $1 trillion worth of commercial properties will go into foreclosure in the coming year as owners default on loans, adding that “those who are heavily leveraged are going to have a very difficult time.” However, he pointed out that financing remains available for landlords and developers who are willing to work with banks at lesser loan-to-value ratios.

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