CHICAGO-The retail market is coming back from therecession-caused trough, with tenants interested in expandingagain, according to many of the attendees at National Real EstateInvestment Trust’s REITWeek here. However, development will beconsiderably off from the past 10 years, they said.

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“I’d say we saw about 40 new regional malls built in the pastdecade, with us doing nine of them,” said Robert Taubman, chairman,president and CEO of Farmington Hills, MI-based Taubman Cos. “I’dsay you’re only going to see 15 new malls in the next 10 years. Wewant to build almost half of them.”

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Taubman was joined by other retail REIT executives in sayingthat retail is starting to see a return to a tenants market. OtherREIT presenters included Macerich, Simon Property Group, RegencyCenters, Agree Realty Corp., Kimco Realty Corp. and Hammersonplc.

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There is a large group of consumers who, in fear of losing jobswere afraid to make purchases, feel better enough about their jobsecurity to start spending again, Taubman said. “That’s part of thecomeback. However, to see real growth, we need jobs, and that’s notgoing to be a leap to the top of the ‘V’. It’s going to be a slowand steady growth.”

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David Simon, chairman and CEO of the large Indianapolis REIT,agreed. “Patience is the order of the day. We have to be patient asto where we allocate capital,” he said during his company’spresentation.

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Simon took some hard classes in patience this past year, as hisfirm doggedly pursued the takeover of bankrupt General GrowthProperties. Instead, GGP went with Brookfield Asset Management,based in Toronto, for a reorganization plan.

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Simon said Thursday that the pursuit was a “major, major, majortransaction for us, on a risk scale,” but he was cavalier whentalking about the rejection. “We learned that, really, the companywas not for sale. At the end of the day, they chose to sell 75%. Wewould have liked to have known sooner...” he said.

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After being asked if there’s any chance of another offer beingsought before the GGP reorganization begins, Simon said he standsby his statement that enough is enough. “We have moved on,” hesaid.

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Arthur Coppola, chairman and CEO of Santa Monica-based Macerich,said equity that had been waiting on the sidelines to purchase GGPproperties is now looking for good financing deals. Also, tenantshave retooled and been able to survive on fewer sales. With thereturn of consumer spending, this efficiency and available moneypromises to show profit, he said.

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“We’re still not getting big leases, but I think starting thisyear, and showing more in the next two-three years, rents will riseand we’ll see a return. Our primary tenant base is healthy.Retailers are adjusting to the new normal,” Coppola said during theconference’s luncheon presentation.

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