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PORTLAND-”If we expect consumers to buy our way out of this economic quagmire, they have plenty of places to get the job done,” quipped John Reinhold of National Retail Properties during last week’s annual forecast breakfast put together by the local Institute of Real Estate Management chapter. Alas, he adds, “it will be a very difficult holiday season for most retailers.”

More than 2.5 million sf of retail space has been added to the regional market in the past 18 months, he said, and while some imminent projects have been put on hold as of late, several more projects should break ground in 2002. Those expected to get under was include the second phase of Gresham Station, which will include an additional 260,000 sf of retail. Another is Bridgeport Village in Tualatin, which will include 400,000 sf of retail.

Meantime, the 300,000-sf Shops at Tanasbourne is on hold, says Reinhold, while the 380,000-sf retail portion of the Cascade Station development (near Portland International Airport) is now more than a year behind schedule.

Looking forward, large national chains and mid-to-lower market restaurants will continue to expend in 2002, albeit more slowly than expected, predicts Reinhold, adding that theater chains may even be back in the market following two tough years of adjustment. On the downside, Reinhold says leasing sub-anchor tenant space less than 20,000 sf will continue to be a challenge through 2002, and owners will be forced to entertain more concessions.

“Lease renewals will take longer to negotiate and requests for rent reduction will occur,” he predicts. “Tenants will escalate their demands for broader caps on Common Area Maintenance expenses and they will escalate their challenges to all property expenses.”

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