Analysts Dissect ICSC Meetings

However, he concedes that the convention was busier than ever for shopping-center owners and landlords, who did not indicate that there was any slowdown in the demand for retail space. "Whether the strong trends remain sustainable going forward is debatable," says the report. "But we have raised this concern in each of the last several years with no sign of moderation yet in sight."

Analysts from Morgan Stanley and other firms note meetings with the Mills Corp., which is up for sale after experiencing accounting problems that have led to layoffs, the restatement of financial reports and an SEC investigation. The reports indicate that Mills' centers are performing well operationally and that the Arlington, VA-based company's executives would rather sell parts of the company than the entire firm or would at least like to keep its management in place if all of it is sold. "While there may well be upsidepotential in many assets, we doubt the potential suitors will pay up for it," notes a Bank of America report.

Overall, shopping-center owners are more interested in the development and redevelopment of properties than acquiring assets, and a majority of that building will be in the open-air sector of the business as opposed to malls. The development pipelines at CBL & Associates, the Macerich Co., and Simon Property Group are all formidable, says Bank of America, following meetings with those companies at the convention.

Morgan Stanley notes that landlords seem to be bracing for major closures by movie-rental chain Blockbuster Inc. The report also says that many shopping-center owners saw no sign of representatives from Sears Holding at the convention "suggesting that the retailer is unusually focused on things other than its real estate these days."