I just returned from the annual ICSC RECon 2012. Those that aren’t familiar with ICSC, it stands for the International Council of Shopping Centers. There’s no other retail real estate convention that attracts a worldwide audience like this event. It’s held at the convention center in Las Vegas, occupying over 3 million square feet of space.
Planning is essential months prior to the convention. With over 30,000 attendees, over 1,000 companies and 300 municipalities, you better know where you need to go and who you are meeting. And by the way, if you have a meeting in south hall followed by a meeting in north hall, you need to plan for the 20-30 minute walk. The ‘booths’ as they call them are really not my definition of a booth. Many have furniture and TV screens nicer than my house, and floral arrangements that would make any florist envious.
Simon Property Group used to be front and center with a mere 40,000 SF booth. As the world’s largest shopping center developer, they have moved off-site to one of the glamorous strip hotels to host their own mini-convention. However, you have to be invited to meet with anyone from Simon. I guess when you’re the biggest, you can do what you want.
Developers, retailers, brokers, designers and a myriad of other industry related fields gather for the four day conference. Standard practice is to book appointments in 30 minute intervals with close attention paid to travel time. We actually refer to it as ‘speed dating.’ If you have a specific retail project you are trying to lease, the object is to meet with as many potential tenants as you can. Pick which ones you like and get to know them better through a letter of intent.
There was optimism, the halls were full and deals were actually getting done. It’s been a tough road for the retail industry. In fact since 2008, we’ve seen only one shopping mall open and it was a gut-rehab of an old, dying center in Salt Lake City. Other than the Outlet Industry, which has seen 8-10 centers open during this same time period, full-price malls have seen no growth, only decline.
The last few years have brought focus to the industry, placing emphasis on right-sizing portfolios, fixing balance sheets and generally getting into better shape. Retailers are back to wanting to add stores and looking at new markets to enter. Vacancies are leveling off which could mean new developments starting in a couple of years. Holladay Properties has begun construction on a new spec retail building at our Heritage Square development in Mishawaka, Indiana. Despite the recession, we’ve gone from roughly 60% occupied to over 90%. Optimistic? This industry needs it. Hopefully, what happened in Vegas doesn’t stay in Vegas!