Retail sales are remaining relatively stable, and landlords seemmore upbeat about the overall retail environment. Arecent videointerview we did with Michael Glimcher made thingssound like they're going in the right direction.

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But the unemployment situation is apparently still plaguingshopping-center landlords. Vacancy rates in the third quarter at retail centers held at10.9%, the same they were during the second quarterand the highest since 1991, according to Reis. (The record of 11.1%was hit in 1990.)

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And if the recovery is beginning, shopping centers aren'texpected to follow that uptick until the next 12 to 18 months.

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What we find most interesting is that regional malls have lessvacancy, with their rates only at 8.8%. Wouldn't it make more sensethat the necessity retailers in smaller centers would performbetter in this environment?

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