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Wednesday, October 10, 2007

Strip show via Crains Business

Blog entry: October 10, 2007, 2:19 pm Author: SCOTT SUTTELL

U.S. strip-mall vacancies inched up to 7.4% in the third quarter, a 5½-year high, according to a Wall Street Journal story that includes a comment from the CFO of Beachwood-based Developers Diversified Realty Corp.

The newspaper notes that rentals of retail space in weak housing markets “are getting hit disproportionately hard, as consumers rein in their purchases.”Sam Chandan, chief economist at Reis Inc., a New York real estate research firm, tells The Journal, “There's uncertainty in the market, and there's uncertainty on the part of retailers as to how consumers will respond to the changing conditions.”

The strip-mall vacancy rate was up from 7.3% in the second quarter and 7% in the year-earlier period.“Some retailers have tapped the brakes on expansion plans, according to several real estate executives,” The Journal says. “The home-furnishings area is particularly weak.”Even so, the paper notes, “Retail in most of the rest of the country is still solid.”

The Developers Diversified CFO, Daniel B. Hurwitz, is among real estate executives who see little effect from the market turmoil.“The consumer has been amazingly resilient, and when you combine that with the strong fundamentals of retail real estate, we are still cautiously optimistic," Mr. Hurwitz tells The Journal.


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