NEW YORK — The International Council of Shopping Centers’ 2007 New York National Conference and Deal Making lived up to its name despite the troubling economic news that’s been affecting other regions of the country.
This story first appeared in the December 10, 2007 issue of WWD. Subscribe Today.
“What was surprising was that business was booming,” said Lisa Rosenthal, a broker at Ripco Real Estate. “Deals were getting done. It was bigger than last year in terms of attendance and there were more booths than last year. The economy is precarious in other parts of the country, but rents are getting higher here.”
The activity came as a tragedy unfolded Wednesday in Omaha, Neb., where a gunman killed eight people in the Von Maur department store at the Westroads Mall and then killed himself. “This is definitely a competitive industry, but everyone’s thoughts are with the victims, the people who work at the center and the ownership of the center,” said Malachy Kavanagh, vice president of communications for the International Council of Shopping Centers. “The center and its owner [General Growth Properties] will evaluate with security staff and the local police what worked in terms of an emergency plan and what can be improved upon.”
Some centers, he added, could react right away by increasing their own security and requesting a greater police presence to put shoppers at ease through this holiday season.
Kavanagh said the industry collectively works on security issues through the ICSC security subcommittee that meets every March, but is planning an additional meeting in January to evaluate the incident and other security issues.
“I wouldn’t say these kinds of incidents are on the rise,” Kavanagh said. “This was not an attack on the center or the industry. This was an individual who decided to make a very public, impactful and horrific display of his despair and chose the center because people have a connectivity to it.”
As the incident reverberated through the ICSC, the economy wasn’t far from the minds of the 8,600 retailers, property owners and real estate brokers who attended the convention at the Hilton New York & Towers Dec. 3 to 5.
“I was pleasantly surprised,” Jeffrey Roseman, executive vice president of Newmark Knight Frank, said about the tenor of the conference. “It was busy. Everybody seemed as aggressive as in the past few years. Clearly, there was some discussion about what’s going on in the world. But it was unanimous that New York City remains somewhat insulated to what’s happening in the rest of the country.”
Roseman said he left the convention with offers and briefs from retailers. “I’ve been to ICSC conferences before that have been a bit more downtrodden,” he said. “Retailers are encouraged that the banks have slowed down [their expansion] and that they won’t have to compete for those corners anymore.”
According to brokers, retailers in expansion mode included Tommy Hilfiger, J. Crew, BCBG Max Azria, Target, Kohl’s and TJ Maxx. “The Apple reps were at ICSC,” said a broker who requested anonymity. “Brooks Brothers was also there.” Modell’s and Daffy’s are looking for space in New York City and Nike is said to be interested in finding a location in Times Square.
“In New York, retail sales seem to be very good, fueled by tourists,” said Robin Abrams, executive vice president of Lansco Corp. “Luxury brands seem to be performing well and the nationals are doing well here, but in the middle of the country things are a little bit different.”
While Abrams found the convention upbeat, the specter of a slowdown was raised. “It was well attended, very vibrant and energetic and a lot of business actually seemed to be accomplished,” she said. “But the convention was the first place I heard people talk about setbacks and the word ‘recession’ was actually uttered by some. People are wondering how the home mortgage crisis and [credit] card debt is going to impact retail sales.”
Richard Brickell, senior vice president of Joseph P. Day Realty Corp., which owns properties in the Grand Central Terminal area and 366 Fifth Avenue, said, “The people on the front lines, [building] owners and people in the apparel and accessories business, see a slowdown. There are people who feel that New York City is insulated. I disagree. We all have to have a very cautious but opportunistic outlook about the city’s resiliency. The world has changed since mid-July. As owners, we have a Depression-era philosophy. We look for creditworthy tenants and don’t fight for the last dollar.”
Peter Ripka, partner in Ripco Real Estate, said, “There is no doubt the conference was busy and there is also no doubt that people were there to discuss expansion plans. Many retailers are very strong and one poor Christmas isn’t going to stop them. Everyone knows that consumer patterns may be changing and subprime mortgages are creating problems, but we’ll figure it out. The retail real estate supply is still tight. I haven’t seen rents come down yet. Tourism is such a great thing in Manhattan. There is always something to keep this city going.”