In a retail climate often described as a veritable desert fornew developments, there have been recent signs of life. David Sobelman,Executive Vice President of Calkain Companies, has observed that inhigh credit tenants, there has been a relatively unnoticed trend indevelopments.

Below he answers five questions relating to this trend:

1. What, if any, developments areyou seeing in the net lease or retail markets?

High credit tenants, those with investment grade credit ratings,seem to be the only tenants currently seeking expansionopportunities. These include Walgreens, CVS, TD Bank, Chase Bank,Blue Cross Blue Shield.

2. Do you see any trends developingwhich may indicate our future?

It seems that there is more “chatter” about looking for new sites;either ground up development or retrofitting existing locations fornew tenancy.

3. Have you seen any tenantdevelopment lately? If so, how much and concerning which tenants orsectors?

Short answer, yes. Walgreens is active, as is CVS. Drug stores,c-stores, some banks are taking over vacant bank sites throughmergers mostly though.

4. Why do you think there is apreference to develop new properties when vacancies are veryhigh?

Cheap land. Lower construction costs, developers being able tonegotiate better contracts with contractors to build sites andincrease their overall returns.

5. Are these developments relatedto certain areas, such as the urban market?

There is a definite trend towards proven markets, urban real estatefalls into that category. Less speculative areas are sought outmore than “in the path of growth” areas that were popular 3-5 yearsago.