Shopping Centers Today

JUL 2018

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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6 S C T / J U L Y 2 0 1 8 T H E C O M M O N A R E A N E W S F R O M A LL C O R N E R S O F T H E I N D U S T R Y INVESTORS LOOK FOR CENTERS WITH ROOM TO IMPROVE 8 LANDLORDS HAVE NO TROUBLE FINDING CAPITAL, EXECS AT RECON SAID 9 MALLS AND HOTELS MAKE GOOD BEDFELLOWS, ACCORDING TO EXPERTS 11 A NEW APP MAKES SITE SELECTION A PIECE OF CAKE, LIZ HOLLAND SAYS 12 S tore closures are actually a really good thing for the econ- omy, Suzanne Mulvee, research director at CoStar Group, told attend- ees during a presentation at RECon. Mulvee talked about a perfect storm of overbuilding during the 30 years leading up to the Great Recession; a demographic shift that she said "turned against" retailers; and a change in consumer shopping preferences. But the healing has begun, asserted Mulvee in her session, titled "Shrink to Grow," and it is time for developers and retailers in the strong trade mar- kets to go on the offensive. Mulvee cited store closures as being one of the biggest reasons for this recovery. And in fact, she noted, more closures are to come: With some 95 million square feet of store closures already announced thus far this year, it is a sure bet that 2018 will surpass last year's 105 million square feet. "A lot of folks like to point to the disruption in the retail market and say, 'It's about online shopping,' " Mulvee said. "I don't think it's about online shopping — I think it's about over- supply; I think it's about demograph- ics; and it's about weathering the worst recession since the Great Depression." Mulvee bases her positive outlook on a confluence of trends. Low unem- ployment rates are beginning to foster average annual wage growth of about 4 percent. Additionally, the Millennials are now entering the prime earning- spending age range of 35 to 54. That same demographic trend among the boomers helped drive the wave of overbuilding, Mulvee says, but retailers and developers were unprepared for any spending collapse as boomers aged beyond those prime spending years. When retailers shed unprofitable stores, the industry gets healthier, expert says By Joe Gose SHRINKING TO GROW

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