This time last year, shopping center developers weren’t having much fun.
In 2009, retailers were either on the chopping blocks or clamping down on expansion plans. In 2009, mall projects introduced just a year before to great fanfare were put on indefinite hold.
Other than a few notable redevelopments, and a handful of projects that actually came out of the dirt, there wasn’t a lot in the industry to cheer about.
I’ve heard more than a few industry experts say that 2009 is best left forgotten. I see their point, but don’t entirely agree. Some good news did manage to peek through an otherwise lackluster year. Retailers got their houses back in order, shearing overhead and shoring up profits. Developers took a closer look at existing assets, executing physical turnaround plans for suffering centers and beefing up leasing programs. Both landlords and tenants benefited from the introspection, I’d say.
The 2009 slowdown prompted some changes in Chain Store Age’s coverage of the industry, as well. For the first time in 21 years, in the May issue we don’t rank a top five fastest-growing developer category or a top five fastest-growing acquirer category. There simply wasn’t enough activity in either sector to justify such as list.
Instead, we highlighted what did happen on the development and acquisition front in 2009. For this April/May real estate issue, distributed at the International Council of Shopping Centers’ annual RECon convention in Las Vegas, we featured 15 projects that managed to find a way to get built last year. (Click here for related story.) Afew projects are large, such as WS Development’s Legacy Place mixed-use center in Dedham, Mass., (featured on this issue’s real estate cover) and CBL Properties’ Settlers Ridge open-air development near Pittsburgh and its Promenade power center in D’Iberville, Miss. But most are small. A few are new builds, others are expansions to existing properties. But all are evidence that, even in a recession, retail real estate took a baby step forward.
There was even less to report on acquisitions. While plenty of big deals (think Simon Property Group’s acquisition of Prime Outlets and a press-time pending, and hostile, General Growth takeover) launched negotiations in 2009, none closed by year’s end. Still, as writer Debra Hazel penned in her coverage (Click here for related story) ,the market was not completely dead. “A number of well-capitalized companies took advantage of the lull to purchase individual projects,” she wrote. “And 2010 may see an increase in activity, leading to more retailer confidence about expanding.” So our coverage of the top acquisitions of 2009 is as much focused on the seven months ahead as it is on the 12 months behind.
This time next year, there’s a chance that Chain Store Age will return with a top five fastest-growing developers and a top five fastest-growing acquirers, as the market continues to loosen and projects are released to start construction. But I’m not holding my breath.