Carl Cronan is editor of RealEstate Florida magazine.

|

HOLLYWOOD, FL-Opinions on whether the US can avoid recession, orif we're in one now, were widely varied during an InternationalCouncil of Shopping Centers conference in South Florida lastweek.

|

"I don't think we're going to see a technical recession, but Ithink the first half of this year is going to be challenging," saysHessam Nadji, managing director of research services with Marcus& Millichap in San Francisco.

|

Nadji, one of several presenters and panelists during thethree-day ICSC Conference on Open-Air Centers concluding Fridaymorning, notes that consumer wealth tied to homeownership remaineda net positive last year compared with 2002 a point largelyovershadowed by ongoing foreclosures.

|

Peter Linneman, real estate professor at the University ofPennsylvania's Wharton School of Business in Philadelphia, is evenmore succinct: "I think this will be an OK year, but I think '09will be a recession year."

|

Milton Cooper, chairman and CEO of Kimco Realty Corp. in NewHyde Park, NY, believes we're already in a recession, largely dueto an excess inventory of real estate loans being held by banksthat are practically unwilling to finance new deals.

|

"We're facing a liquidity problem that is different from theother times," Cooper told an audience of approximately 800 duringThursday's luncheon address at the Westin Diplomat conferencecenter on Hollywood Beach.

|

What others attending the annual OAC conference think may be amatter of perspective. By a show of hands, the vast majoritybelieves current market conditions are comparable to the priorrecession in 2001-03, yet few hands remained in the air whencomparing now to the 1990-91 recession.

|

ADVICE FROM THE PROFESSOR: Linneman, who presented thekeynote address during the OAC luncheon and conducted an on-stageinterview with Cooper, says lenders aren't likely to loosen theirgrip on capital availability until they regain their trust ofdevelopers, especially those behind the current condo overstock."Capital has gone on strike," Linneman told the audience. "Don'tcross the picket line."

|

He advises waiting at least six months to approach financialinstitutions, allowing enough time for recent Federal Reserveinterest rate cuts to take hold, and notes that CEO changes atthose lenders might also help in the long run.

|

MORE ADVICE FOR DEVELOPERS: While open-air or "lifestyle"shopping centers are still favored by retail developers over indoormalls, some of them are becoming unnecessary and should be shelved,according to one executive.

|

Nearly 200 lifestyle centers across the country were promoted atICSC's popular spring convention in Las Vegas last May, allclamoring for the top tenants in their respective regions andcommunities.Those struggling to win leases should view that as asign that they shouldn't proceed with construction, says MarkFallon, VP with Jeffrey R. Anderson Real Estate Inc. in Cincinnati.Retail developers are better off not wasting their money,regardless of how optimum their sites might be, he says.

|

"Do us all a favor and don't go to Vegas," Fallon remarkedduring a town hall meeting on lifestyle centers, drawing a rousingreaction from those in attendance.

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.