We asked our 2009 Deal Maker Top Producers (based on 2008 production) to provide their thoughts about the market in 2009, and what is in store for 2010 and beyond.
Retail Report
by Billy Cooper, NAI Southern Real Estate
It may be safe to say the worst is over but the road to recovery in the Charlotte retail market will be long and arduous. The seriousness of the recession has been unparalleled in the United States, with the exception of the Great Depression, and the Charlotte retail market should expect a deliberate recovery.
Charlotte will likely rebound far sooner than the rest of the country and stabilization will lead to retail opportunity. Integra Realty Source, America’s largest real estate valuation and counseling firm, estimated Charlotte to overcome the retail setbacks of the recession and balance at a far greater rate than the majority of markets in the country. The opening of IKEA, a 356,000 sq foot home furnishing store from the Swedish retail giant remains optimistic that the store will do well in Charlotte despite the recession that has hammered other home furnishing retailers through out North America.
The Charlotte economy is already displaying signs of early stabilization. According to Property and Portfolio Research Daily, Charlotte and Raleigh were the only two metros in the country showing back to back months of job growth in 2009. Furthermore, the Charlotte housing market should rebound well ahead of the national average since its values were not as overinflated during the boom of the past decade as most metropolitan cities. Both of these indicators provide hope but it conservatively will be mid 2011 before the Charlotte Retail market will truly feel the recovery.
The Retail real estate trends for 2010 will likely be more concessions from Landlords coupled with reduced rental rates to attract new Tenants. Vacancy rates will undoubtedly increase until the economy stabilizes. Furthermore, Landlords will be forced to be creative in reworking existing Tenant leases to prevent the sluggish economy from pushing retailers over the edge and forcing more closures. The retailers who will consider expansion in 2010 will be requiring aggressive terms knowing their leverage is greater than it’s been over the past decade. The Charlotte retail market in 2010 will likely be stronger than 2009 but that will not be a large feat.
Editor’s Note:
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