MIAMI-An overall nervousness in the market is making retailers delay decisions and consolidate, while retail property owners are forced to offer concessions, according to expert panelists who spoke at a program hosted by Commercial Real Estate Women Miami and Commercial Industrial Association South Florida at the Hyatt in Coral Gables Tuesday. Fear is driving the market, and even healthy retailers are getting rid of 10% to 15% of their real estate portfolio, said panel moderator Carol Wyllie, executive vice president of the Miami Lakes-based Graham Companies. Panelists agreed that rough times lay ahead for the retail market in the next few years.

Paco Diaz, senior vice president with CB Richard Ellis in Miami, said the biggest change that has taken place over the last year is that we are now in a tenant-driven market. Owners are offering substantial concessions, panelists agreed, and tenants are demanding rent reductions, reduced annual escalations and improvement allowances.

"Take care of your tenants, and work with those that are deserving," Diaz advised owners. "Hang on to whoever you can until 2011, because by then it's going to be a landlord's market again." Retail developer Bill Ogden told the audience that now is the time to invest in properties to make them better, commenting that the market is moving from an era of development to an era of management.

Diaz told the gathered audience that Miami-Dade County could see a 90% occupancy rate in 2009, but that "all in all, that is not so bad." According to panelists, rents in the county are expected to come down another 10% to 25%, but point out that from 2002 to 2007 the region was enjoying very high rents and now we're going "back to basics." Even high-end retail has seen 20% to 25% rate drops, said Mia Stierheim, a retail specialist with Stierheim & Wesson Retail Realty Inc. in Miami.

There is a shift in the type of tenants that are leasing in retail centers because of a loosening of standards, she said. There are now more opportunities open to 'mom and pop' shops. Vacated spaces are giving retailers who are looking to fill gaps in the market new options, added Diaz. Big boxes like Walmart and Sam's Club are just an example of a few retailers interested in space within Miami-Dade County, he said.

Seth Gadinsky, president of Miami Beach-based Gadinksy Real Estate, says more suffering in the retail market could be mitigated if landlords are willing to work with tenants. After the panel discussion he told GlobeSt.com that the best advice for owners is to "get your head out of the sand if it's there." The downturn has been focused on the residential market, he said, but after January there will be a focus on commercial real estate. Be proactive, he advised, by talking to lenders now about potential problems in the future.