Wednesday, May 23, 2007

More ICSC notes....

Two more quick things on ICSC:

1. The Wall Street Journal had a mixed bag article on shopping center growth in today's edition (sub. required). While the headline talks about signs of a boom, there is also concern about too much money chasing deals and owners preferring development deals to buying existing property, presumably because cap rates are so low. And even the CMBS guys, apparently, are worried about their conduit loan portfolios, perhaps because rating agencies are tightening the screws.

Interestingly, this blogger thinks that commercial real estate is destined to go "over the cliff" soon. I respectfully disagree, if for no other reason that, unlike residential real estate, the US commercial market is world-wide. And outsiders still see our dirt as super-cheap. (I hope I am right, of course, if for no other reason than I like being busy.)

2. Department stores are feeling the pain of the new big trend in shopping: mixed-use projects. Fine with me. Anyone in the business knows that, when doing a regional mall, the anchor stores can be the biggest pain in the posterior imaginable. The key issue? Control, of course, particularly regarding parking and tenant mix. My former colleague, Sheldon Halpern, stated that the big guys just can't get the control they are accustomed to anymore because of multiple owners. I also think part of the issue is that the big retailers are more like 400 pound gorillas these days, and certainly not 800 pound ones. I'm sure you can tell I am just weeping....