Spending drop may not rattle all retailers
Sept. 11 may have crimped consumers' spending habits for the short term. But don't expect to see many boarded-up shops at the local mall just yet.
The Commerce Department reported Friday that retail sales in September posted a 2.4 percent overall decline, its sharpest one-month drop in nine years. But real estate experts say commercial property owners are better positioned to ride out recession than they were in 1990, when a construction spree by developers led to a glut of buildings just as business was shrinking.
And though they are not likely to slash rents, owners should still find tenants. While properties full of high-end restaurants or specialty stores may be in for some rough sledding, experts add, there are still retailers looking to expand into any desirable property.
"Some of the stronger retailers, the Wal-Marts and Home Depots of the world, are still bullish on expansion," said Bernie Haddigan, managing director and head of nationwide retail for Marcus & Millichap, a commercial real estate firm.
It's a continuation of a trend. When the regional discounter Bradlees folded last year, for example, other retailers including Target and Kmart swooped in. Market watchers are unsure just how a prolonged recession might affect expansion-minded firms.