You said..." when the economy slows and threatens to go into recession, it's usually bad for all classes of real estate" Ahhh. did you see what happened with single family housing while the US economy (Stock markets) sputtered for 30 or so month's (2004 thru 2006) . HOUSING AND LENDING SOARED. Brokers and bankers alike bought cars and boat's and toy's and spent money in shopping centers and invested and HEY! WAIT A MINUTE! So, consumer housing and CDO / MBS may have carried the economy (somewhat) but your right! It now is evident it was thanks to fraudulent lending practices and predatory loan originations . www.borrowerhotline.com Maher Soliman Chief Compliance Officer
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The Other Real Estate Crisis
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Like Pacific Sunwear, Talbots had sought to expand its market beyond its core consumer (in Talbot's case, women over the age of 35) by introducing new retailing concepts, including Talbots Mens and Talbots Kids. But last week, Talbot's, having concluded that the kids (and the men) aren't all right, announced that it would shutter its 66 Talbots Kids and 12 Talbots Mens stores sooner rather than later.
Taken together, these closings amount to a tiny fraction of the nation's retail space. But they're indicative of a larger retrenchment under way, one that is likely to continue. America's largest chains—from Wal-Mart to Home Depot, from Starbucks to the Gap—are all in slow-growth mode in the oversaturated domestic markets. Circuit City and Sears are just two national retailers who may find it necessary to shrink their national footprints in 2008. And with consumer spending having slowed, it's much more difficult for landlords to fill newly vacated space.
Since many of America's largest mall owners are well-capitalized firms that built or acquired their properties decades ago, we're unlikely to see the carnage that has befallen publicly held home-builders. But signs of stress are emerging. Centro Properties, an Australian real-estate firm that has made huge acquisitions of American malls at inflated prices in recent years, is now holding a clearance sale on its own properties.
© 2008
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