Though attendance and dealmaking is expected to be down in Las Vegas, retailers and developers still say it's a MUST event.
Strolling the Agora for the March 16, 2009 issue of SHOPPING CENTER DIGEST.
We understand the reasoning behind recent decisions by hard-hit owner-developers and retailers to cut even further what they consider unnecessary expenses–and to direct these efforts at conventions, travel and hotel costs–when dealmaking in this industry may be at its lowest point ever. For most of us, however, to avoid completely the upcoming ICSC RECon in Las Vegas could be a substantial mistake.
Some companies, and rightly so, will be taking less exhibit space on the convention floor, will reduce the number of registrants from those attending in the past, and will limit substantially the dollars budgeted for entertainment.
Only because of its size as the largest shopping center landlord does the decision by Simon Property Group–to give up its massive presence in the Leasing Mall and take a skeleton crew to deal from hotel suites– shake up the entire industry. None of us are on a par with Simon, willing to pay seven figures, according to mavens in the industry, to forsake the convention floor, and still consider it as cost-cutting. No matter where SPG operates from, retailers seeking to make a deal or re-negotiate leases will find their way to this landlord even if it chooses hotels miles away from the convention center.
Calls to reach the company for clarification were not returned.
The impact of the economic crisis has been felt in this industry for some time; each of the ICSC dealmaking events I've attended since early fall have recorded a drop in attendance and activity from the tally of the previous year. No one expects the Las Vegas meeting to be any different.
Though some may quibble with ICSC's estimate that “some 25 percent of the leasing deals clinched each year in the U.S. are closed at RECon,” we've never doubted that the spring convention has been the most important annual gathering of retailers and developers for some 50 years.
Some comments from industry stalwarts about the May event include:
. Paul Freddo, Developers Diversified Realty: “… it's about building upon the relationships we have with retailers. Those relationships have never been more critical.”
. Kris Kral, Sweetbay Supermarket: it is “… an opportunity to see deals that might otherwise have been presented to someone else [who] has since slowed their growth…I am looking to take advantage of the opportunities in the market especially backfill locations.”
. Rick DeKam, Midwest Realty Group: “I am guessing that with reduced attendance, the people that do attend will be the 'core' of our industry and most likely the ones doing deals. Therefore, maybe this is honestly the best time to attend?!”
. It's a no-brainer to Shlomo Chopp of The Case Group of Companies: “From an investor's perspective, there are so many pretenders out there looking to 'buy' good deals that today more than ever, you cannot underestimate the value [of] looking the other party in the eyes! From a landlord rep perspective, do you want to risk not knowing about that one retailer that will fill your space?”
. Albert Haddad, GHI Real Estate Advisors: “The key is to continue to evolve as a company, given the events evolving around us daily… it is extremely important to understand all the variables that affect and effect your business; ICSC Vegas has always been at the epicenter of that variable aggregation… those who focus, listen, learn and execute will be the first to rise out of these challenging times… “
Of course, not all are in agreement:
.Jacob Gabrie, El Dorado Hills Town Center Property Management: “This is a tougher market and not everyone has the capital to spend on business development… we have to learn as I have to use all the available resources and I am not sure that this year I will be attending… I believe we have a tough road ahead we have to be creative and learn to use every available resource to gain knowledge and make connections.”
. Keith Kennedy, Durrant Group: “My company has always been on the periphery of the event, but it has always been valued as a good forum for developing new relationships as well as strengthening existing ones. We are still undecided if we are going to attend.”
As a reaction to the reduced number of exhibitors, ICSC has cut the square-footage of the Leasing Mall area by at least 40,000 sq. ft., but will still have 840,000 sq. ft. for 1,000 developers and retailers, while the Trade Show will feature 500 exhibitors. It points out “some 300 retailers are attending this year… including such first-timers as American Dairy Queen, Best Western, Buffalo Wild Wings, Christian Bros. Automotive, Fransmart, Massage Heights, Sandella's Flatbreads, Starmax and Tim Horton's.”
Reacting to the large number of experienced dealmakers who have been laid off or furloughed, said the trade association, “… The event will cater specially to those who have lost a job.” Called REConnect, the area will contain specialists including those in executive search to advise on resumes, job opportunities, and the like.
“Even if you're a retail chain that is not expanding,” said one national tenant, “it is still important to attend, strengthen relationships, keep a dialogue going. We're gonna get out of this malaise and those who keep the door open are the ones who'll bounce back faster and be in a better position to flourish.”
The trade association is also stressing discount rates at hotels used for the convention, and package deals. However, rates at other accommodations such as suite hotels including full breakfasts are still less expensive.
More information on Shopping Center Digest and our associate publication, Directory of Major Malls, may be obtained from our website, www.shoppingcenters.com.
Strolling the Agora was a twice-monthly column discussing trends, issues of importance, and commentary on the leasing/development aspects of the shopping center/retail chain industry in the US and Canada. Called Strolling the Agora, it was a part of Shopping Center Digest, a newsletter founded in 1973 published until September 2010. The column provided expert insight into various retail focused topics. It was primarily authored by Murray Shor, Editor & Publisher as well as industry and veteran retail experts. A smattering of archived columns are presented here for your reading “pleasure”. It's an interesting “look back” at what were current hot topics at the time with regard to shopping center/retail industry focus, development and leasing expansions and processes, retail mix, opinions and more.
About Murray Shor:
Reporting and writing on the shopping center/retail industry since the late ’60s. Began as editor at Chain Store Age, founded Shopping Center World (now Retail Traffic), Shopping Center Digest “The Locations Newsletter” in 1973, and the Directory of Major Malls in 1979. Each issue of Shopping Center Digest contained a column called Strolling the Agora which provides commentary on trends, activity, issues of concern to development and leasing in the shopping center/retail industry.