News and Events
A Look Back: 2009 Retail Real Estate
RCS Senior Vice President Spence Mehl summarizes the activities of 2009 and takes a glimpse at what may be in store for 2010.
Nov 10, 2009 ABF Journal Spence Mehl
For retailers, landlords and developers, the punch line to the old joke about the light at the end of the tunnel being a train is hitting a bit too close to home these days. As tough as 2009 has been on retailers, a strong recovery might not be quite as close at hand as some have predicted. While some retail real estate analysts see brighter things ahead for 2010 – there is some data to support that prediction – the bottom line is that most retailers’ bottom lines are likely to look less impressive in the near future, and retail real estate markets will continue to remain soft well into 2010.
It would not be accurate to characterize 2009 as a wholesale collapse, but retail real estate values have certainly gone down dramatically. Some figures place the decline as high as 36% nationally. Some of the biggest names in retail have declared bankruptcy within the last year, including such familiar and iconic stalwarts as Linens ‘N Things, Circuit City and Mervyn’s. Some of the real estate has been redeployed, but a great deal of it is still sitting vacant out there, exerting significant drag on the marketplace.
The reality is that there are both big and small names in the industry barely hanging in there, and unless things change dramatically in the months ahead, the bankruptcy rolls are likely to swell. Because so many retailers have struggled throughout 2009, the always important holiday shopping season looms larger than ever this year. Unfortunately, in what will be for many retailers a make-or-break year-end push, there is little reason for optimism that the current dynamics will yield anything more than a modest boost at best.