As many of you know, the leading trade organization for retail owners, developers, brokers, retailers, and financiers is the International Council of Shopping Centers. The group has two significant meetings a year, along with a number of regional meetings that focus on specific issues related to our business. The RECon Conference in Las Vegas in May is our main event, and the New York Conference in December is the other significant show. I just returned from the New York ICSC Conference and offer the following observations:
First, the overall feeling in New York is one of recovery. Hotel room rates were at a premium, and scarce at that. There was a great energy in the air—and a lot of shopping! The conference mirrored that same sense of optimism. Overall, we are seeing a gradual increase in activity.
The retailers have used the last few years to get their houses in order. They have focused on operational efficiency, inventory control and updating the stores themselves. Most retailers are still cautious about aggressive expansion, but many are becoming active again, selectively relocating some units or entering hard-to-penetrate markets like California or the Northeast urban markets.
Second, we are seeing a gradual improvement in occupancies across the country. It is safe to say that new development is extremely limited, and this will continue to benefit retail properties overall.
Finally, the biggest obstacle that continues to affect our industry is the political environment. Globally and nationally, we live in a time of greater risk. European debt, U.S. debt, and the current gridlock in policy-making continue to affect the recovery of our industry.
As optimistic as most people appeared, many shared stories of how transactions had been terminated due to the uncertainty of our “political state.” People want and expect our government to get things done and it is not happening. It is only a matter of time before this causes another significant crisis that “we the people” will have to deal with.