Who knew the nominees for the March 7 Academy Awards were really a metaphor for the retail real estate market?
The year 2008 could best be described as hitting everyone on “The Blind Side.” But, 2009 will most likely be remembered as “The Hurt Locker.” And as we turn to 2010, things are definitely “Up in The Air.”
The holiday shopping season was marginal for most retailers. Some chased the consumer dollar with deep discounts and specials. Others tried to reward customer loyalty.
Whichever the strategy, most retailers were glad to close the books on 2009.
Like retailers, landlords and lenders employed different tactics to survive.
Landlords did lease modifications to help struggling retailers and to keep their centers full. They engaged in aggressive marketing programs and promotional events to draw in consumers.
Banks staffed departments to handle foreclosed properties that came back under their control.
With unemployment and vacancy still high in Orange County, you might say not much has changed since we closed the books on 2009.
The vacancy rate for the fourth quarter hovered at about 8.3%, up from 6.3% a year earlier, but that could be changing with recent and planned tenant moves.
Only time will tell how long it takes for this recent activity to convert into deals.
There are retailers that made strides in 2009 and are planning expansions for 2010.
These include McDonald’s Corp., Doctor’s Associates Inc.’s Subway, 7-Eleven Inc., TJX Cos., Brown Shoe Co.’s Famous Footwear, Ross Stores Inc. and Forever 21 Inc.
Even some retailers with high-profile brands, such as Aeropostale Inc., Buckle Inc., Red Mango Inc. and Ulta Salon, Cosmetics & Fragrance Inc., have plans for new stores.
Additionally, dollar stores still are performing relatively well.
With 2009 now behind us, we cannot predict a complete recovery in 2010, but things are definitely looking “Up.”
Schillne is a first vice president in the Anaheim office of CB Richard Ellis Group Inc.
