Attendees at ICSC NY Conference express optimism about industry

Attendees and speakers at ICSC's New York Conference expressed optimism about the trajectory of the retail real estate industry. In her recent third-quarter earnings meetings with executives from 25 different retail chains, the most common three words spoken were, "It feels better," said Dana Telsey, president of research firm Telsey Advisory Group. Telsey also pointed out that while national unemployment figures are skyrocketing, only about 5% of college-educated workers are currently unemployed. "There's a lot of money still out there," she said. Consumers are buying more home furnishings, jewelry and recreational vehicles-leading indicators of more pervasive sales growth, she added. And sales of discretionary items are beginning to outpace those of staples, she said. For landlords, the field is set for an increase in rental income growth and occupancy for centers in the next few years now that retailers have healthier balance sheets and more are focusing on top line growth, ICSC chairman and Taubman Centers COO William Taubman told attendees. Toys 'R Us is one of those chains that are back in growth mode after the Great Recession. "We're here to make deals," said David Picot, senior vice president of property development for Toys 'R Us. The toy retailer is seeking sites for its pop-up Toys 'R Us Express stores, which offer a limited selection of toys in smaller spaces during the holiday shopping season. The company opened 90 such stores in 2009, and kept 30 of those open year-round after seeing positive sales and traffic numbers, Picot said. "We're hoping to keep a bunch of the ones we open this year as full-time stores after the holidays too," he said. "We're in talks with lots of landlords to make that happen." Picot and his real estate team are seeking sites with between 3,000 and 5,000 s/f and at least 25 ft. of frontage. "We're looking to make a deal now," he said, "move in by June and stay through the holidays in 2011." Representatives from other growing chains such as PetSmart, TJX Cos., Dollar General and The Fresh Market were among those participating in the conference's popular Retailer's Runway. Taubman said the industry owes thanks to the U.S. Federal Reserve for the industry's burgeoning recovery. "The Fed's helping by keeping interest rates low, which helps keep cash flow high at properties and allows banks to extend and modify loans," he said. "We should all thank Bernanke." There was a sense of energy too in the meeting booths that contrasted with the quieter atmosphere there last year. WS Development has emerged from the recession with a strong financial foundation, and is looking to invest $500 million in distressed properties, reported David Fleming, director of corporate marketing. "We're seeing things improving for sure," he said. The firm is also moving ahead with some of its own projects, with a 2011 groundbreaking scheduled for its Market St. at Lynnfield, Mass. mixed-use center. In addition the company is planning a 1.5 million s/f retail component for Seaport Sq., a 6.5 million s/f multi-use project it is developing with Gale International and Morgan Stanley Real Estate on the waterfront in south Boston. Retailers are also eager to expand, said Faith Hope Consolo, chairman of Prudential Douglas Elliman's retail leasing and sales division, citing department store outlet concepts, as well as the bridal and menswear sectors in particular.