Retail Market Roundtable: Panel Expects Retailers to Adjust to a
Retailers managed to make it through the 2009 holiday shopping season with a positive gain in sales figures, but the industry isn’t expecting growth anytime soon.
Because retail is the commercial real estate sector most impacted by unemployment, forecasters say that retail properties will not show rapid improvement during 2010 or 2011. The sector, hampered by weak consumer spending and a restrictive credit market, is expected to suffer rising vacancy rates, NOI decreases and an expanding number of mortgage delinquencies. A market upswing is nowhere in sight.
As Bob Bach, senior vice president and chief economist of Grubb & Ellis, noted in the company’s 2010 Real Estate Forecast, “Retailers and owners of retail real estate will need to adapt to a ‘new normal’ in consumer attitudes that may last for some time, including more conservatism and attention to value as households rebuild the