Retail Collapse Nearing Free Fall

1,100 GM Dealerships to close, each averaging 50 employees. Throw that on the pile of close to 1,000 death row Chrysler dealers and you are looking at around 100,000 more jobs lost and thousands of acres of empty and in some cases, potentially environmentally challenged parcels.

Not scary enough? Consider that the signature retail industry event, the ICSC Real Estate Convention in Las Vegas is down more than 50% this year in attendance. The turnout was expected to be so (and it was) bad that the world's largest retail reit, Simon Property Group, did not even open a booth. What a difference a year makes as last year they had what seemed like acres of elaborate meeting space.

Vegas retail development convention attendance off 50 percent

ROBBIE WHELAN

Daily Record Business Writer

May 18, 2009 8:02 PM

LAS VEGAS — Large swaths of floor space at this year's ReCon convention, the country's most important retail development meeting, are eerily quiet.

The usually jammed corridors of the Leasing Mall, where representatives of city agencies, real estate developers, bank financiers and others hawk their wares and pitch their project ideas in search of tenants and borrowers, are comfortably empty.

"It's a lot less people than last year," said Baltimore Mayor Sheila Dixon, over a lunch of a veggie sandwich inside a conference room in the Baltimore Development Corp.’s booth.

And she's right. Attendance is down by about 50 percent from last year's record number of 50,000 participants, according to a spokeswoman from the International Council of Shopping Centers, which hosts the event each year at the Las Vegas Convention Center. Pressures from the economic downturn have forced developers to cut down on unnecessary expenses, sending only one or two staffers to ReCon instead of a half-dozen, as in years past.

Across the aisle from the BDC's booth, reps from Waterstone Capital Advisors, a Charlotte, N.C.-based boutique investment group that specializes in structured finance instruments, set up a ping-pong table, and employees hit around the ball listlessly, with no one much interested in stopping to chat.

"It's really that bad," Steve Liadis, of the company's sales team. "Our business is down 97 percent. We've gotten totally burned."

Still, the mayor said that by Monday afternoon, she had already had five meetings, all of them productive. At the top of her list is finding a buyer for Harborplace and The Gallery, two prime retail properties in the Inner Harbor owned by bankrupt mall operator General Growth Properties Inc. The mayor said there was strong potential interest from at least one buyer, but declined to say who that was, because of the deal-making process.

"We've had some very positive meetings with some real estate and retail people about some of our older shopping centers, too," Dixon added.

The city is dangling financial incentives including tax credits and community legacy grant funding to help pitch older shopping center properties in less glamorous neighborhoods, including Northwood Plaza and a shopping center in Edmonson Village. Again, Dixon said, there has been strong interest.

"You sell [these properties] based on demographics, based on what's projected to come to the area," she said. "A lot of people are interested in Baltimore. A lot of people like Baltimore."