Economic Update – Retail Deals Still Out There
- Mar 27, 2009
It isn’t the best of times for retail or retail real estate owners and brokers, but the industry isn’t at a complete standstill. That’s the assessment of John Delatour, director of operations and leasing at Jacksonville-based Regency Centers, a specialist in developing and owning grocery-anchored shopping centers and community centers. “There’s no denying that some retailers are going dark, but leasing deals are still getting done,” Delatour tells CPN. “That’s especially the case with grocery-store anchored centers, and even some grocery stores are still expanding, though clearly at a much more modest pace than in recent years.” Among others, he added, local and regional banks (or credit unions), fast-casual restaurants, nail and hair shops, and liquor stores are still inking leases. This is even the case in markets that have been famously beaten up by the recession, such as metro Las Vegas. Nevada Federal Credit Union recently took space at Regency’s 731,000-square-foot Deer Springs Town Center, a newly completed development in North Las Vegas anchored by Target, Home Depot and Toys R Us. “The recession is having an impact, of course,” Delatour said. In the case of Regency’s portfolio, the difficult economy has driven occupancies from about 95 percent to about 93.5 percent. “Still, a lot of properties are still holding their own.” In other retail news, Best Buy Co. Inc., now the “last man standing” among giant big box electronics chains following the demise of Circuit City, has reported a better-than-expected fourth fiscal quarter, though that doesn’t mean earnings or sales growth for the quarter ended February 28. Net income for the company fell 23 percent on restructuring charges, to $570 million, or $1.35 per share, while U.S. same-store sales dropped 4.9 percent for the quarter compared with the same period a year ago. The company stressed, however, that the same-store sales drop was only 2.5 percent in the January-February period, after a 6.8 percent drop in December. If Best Buy’s numbers are any indication, consumers haven’t quite lost their taste for certain kinds of electronics. “A low double-digit comparable-store sales increase for notebook computers fueled the growth as customers increasingly view notebook computers as a necessary utility,” the company posited in a statement on Thursday. “Mobile phones and accessories experienced a nearly triple-digit comparable store sales gain, reflecting significant market share gains.” Best Buy’s share prices got a boost from the news to the tune of $4.21 a share, or about 12.58 percent, and the rest of Wall Street didn’t do too badly on Thursday either. The Dow Jones Industrial Average was up 174.75 points, or 2.25 percent, while the S&P 500 was up 2.33 percent and the Nasdaq gained 3.8 percent–the highest the tech-heavy index has been all year.