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KISSIMMEE, FL-As bad as the market seems for retail real estate lately, it could actually be a lot worse. That message, among others, was conveyed to the thousands attending the International Council of Shopping Centers’ Florida Conference, being held through today at the Gaylord Palms Resort & Convention Center.

During Monday morning’s opening session, five retail experts from throughout the state presented their views on the state marketplace. John Crossman, president of Orlando-based Crossman & Co., moderated the discussion.

Even though 75 bank failures have been recorded so far this year, including last week’s seizure of Colonial BancGroup, the number pales in comparison to the 550 failures occurring in 1988, observed Manny De Zarraga, executive managing director of Holliday Fenoglio Fowler LP in Orlando. Banks make up roughly half of the $3.6-trillion credit market, he says, and while credit remains largely frozen because of banks’ reluctance or inability to fund new deals, other lending sources are stepping forward, offering loan-to-value ratios as high as 75%.

De Zarraga also noted that plenty of loan extensions are happening for retail properties, while those in distress have an 18-month time horizon before foreclosure. “If you’re a lawyer working in restructurings, there’s an enormous amount of work ahead,” he said.

Patricia Blasi, government relations chair for ICSC’s Southern Division with Calamar Enterprises in Aventura, also notes that there are plenty of retail landlords who aren’t experiencing pressure from maturing debt: “You’ve got a lot of owners who are still experiencing good cash flow,” she says.

Indoor malls, once considered a dying breed within the retail sector, are staging a comeback, noted Betsy Trobaugh, director of the Miller School for Retailing at the University of Florida. She advises mall owners to offer customer enhancements such as free wireless Internet service and enhanced seating, as well as offering space to local organizations and bringing back traditional events such as fashion shows.

“It is clearly a time for all of us to get back to the basics of our industry,” Trobaugh told the conference audience estimated at 3,300 attendees. She advised retail owners to look less at development lately and more at managing current assets.

Meanwhile, retailers need to look more closely at opening new locations in realistic developments that actually stand a chance of being completed, said Kim Lopdrup, president of the Red Lobster division of Orlando-based Darden Restaurants. “I hate opening in the middle of fields,” he said.

Discount retailers are faring better than others during the recession, said Seth Layton, vice president of asset management with St. Petersburg-based Sembler Co. A prime example is Wal-Mart Stores Inc., which was once considered the bane of independent merchants and prompted local protests whenever new store plans were revealed: “You’re going to see people being more receptive to Wal-Mart coming in,” he said.

The panel’s sentiments were later echoed by the conference’s guest speaker, Michael Feuer, former chairman and CEO of Office Max and now CEO and co-founder of Cleveland-based Max Wellness. He remarked that ICSC members appear to be ignoring mainstream media reports about the recession.

“It is the worst of times,” Feuer told the conference’s lunchtime audience. “It could also be the best of times.”

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