It seems as if every day there are conflicting reports on the economy.
With the speed of information passed through technology, the market reacts to every story, every piece of economic information. Some might say the market overreacts to this information.
What does seem to be sticking as a theme is that Wall Street is asking retailers about their plans for growth in 2011, 2012 and 2013.
Much of the best real estate has been absorbed and there actually is some competition for retail space occurring in the market.
Several of the big boxes—Target, Wal-Mart, Home Depot and Lowes, among others—have been a bit more optimistic about new store growth for future years. Because it takes so long to make deals for this group, they need to start looking now.
The pattern across the U.S. and in markets like Orange County is that recovery is occurring first where there is water and big buildings. Markets like Las Vegas, Phoenix and Inland Empire are slower to recover but still are showing some positive signs.
Capital is more accessible than a year ago, although it still is a challenge. Deals for shopping centers are happening and, for some of the nicer centers, not at fire sale prices.
In OC, the vacancy rate for shop space in the second quarter increased slightly from 8.5% to 8.7%, but lease rates have been stable at $2.53 and seem to be bottoming out.
Overall, there is more deal activity, more stability and a bit more optimism than a year ago, but the recovery remains fragile and any bit of bad news can materially impact consumer confidence and blow the windsock in the other direction.
Kaplan is a senior vice president in the Anaheim office of CB Richard Ellis Group Inc.
