Shopping Centers Today News Release
Retailers are getting leaner and meaner in reaction to the economic downturn, tenant reps said at ICSC’s Southeast Conference, in Atlanta, last week. “Tenants are doing a lot more homework and not just relying on what the developer tells them,†said Harold Schumacher, president and managing broker of the Atlanta-based Schumacher Group.
“Tenants are calling other tenants to make sure they’re really on board with a center before committing themselves,†said Julie Solomon, the principal of Atlanta-based Retail Insight.
Many chains are slowing or abandoning their expansion plans to focus instead on same-store sales. “It’s an opportunity for the best-in-class chains to refocus on their existing product,†said Ray Uttenhove, executive vice president and Southeast managing principal at Staubach. That trend could benefit landlords seeking to redevelop existing properties, as it will be easier to get these tenants on board, she said.
Van Westmoreland, president of Marietta, Ga.–based Westmoreland Co., helps Wal-Mart find locations in the Southeast. The chain, he said, has become more concerned with the first-year sales and profitability of the new stores it opens and is more sensitive to occupancy costs than in previous years.
“The decision-making process has become much more elongated,†Uttenhove said. “They’re not just going into a new market because a competitor is there.†Other retailers are downsizing prototypes for new stores to boost productivity and lower occupancy costs, she said.
“Two-thirds of our clients are holding back,†Schumacher said. “The other third, usually those with private financing, see it as an opportunity.â€