LAS VEGAS, May 23, 2010 -- The U.S. shopping-center industry grew, albeit slightly, to nearly 105,000 centers in 2009, according to the latest statistics from CoStar Group, Inc. (Nasdaq:CSGP) that were compiled on behalf of the International Council of Shopping Centers (ICSC). While both 2009 and the first four months of 2010 were sluggish in terms of growth in number of centers and total leasable area, we believe there is cause for an optimistic outlook on retail real estate during the latter half of 2010 when growth within the industry should pick up markedly.
Michael P. Niemira, vice president, director of research and chief economist for the ICSC, observed that, "This slowdown in shopping-center industry growth—the largest since at least 1971 for which consistent data exist—was not surprising due to the 2007-2009 recession and the difficulty in securing capital from banks and other lending sources." Niemira added, "But the prospects for the retail real estate industry appear to be improving and the sector, in time, will likely regain its investment luster."
|Measure ||2008 ||2009 ||2010* |
|Total Number of Shopping Centers ||104,148 ||104,919 ||104,990 |
|Total Leasable Area (Sq. Ft., Million) ||7,164 ||7,232 ||7,236 |
|Shopping Center Share of Total Retail Space ||47.1% ||47.1% ||47.1% |
|SOURCE: CoStar Group (*as of 5/5/2010) || || || |
Andrew C. Florance, CoStar Group's founder and CEO, reinforced this point and noted, "The importance of the retail-property market to investors is truly amazing." Florance pointed to new research, sponsored by CoStar, examining the size of the U.S. commercial real estate market and its segments, which suggests that the retail segment of the property market had the largest market capitalization ($2.98 trillion) at the end of 2009, more than office ($1.64 trillion), industrial ($1.07 trillion), hospitality ($895 billion) and multi-family properties ($1.40 trillion). In the recent quarter retail sales have climbed along with consumer confidence and recent employment gains of nearly 400,000 jobs in April bode well for improvements in the retail sector in the months ahead.
Norm Miller, vice president of Analytics for CoStar, noted that, "Unlike industrial and office properties which are still facing rental declines as leases turnover, many retail landlords already renegotiated and dropped rents for existing tenants. Consequently, this flexibility by retail landlords spurred the profit recovery for major retailers and a quicker bottom for rents compared to sectors not as flexible on rents and concessions."
(CoStar will be exhibiting at ICSC's RECon, the global retail real estate convention, beginning today in Las Vegas. Media and attendees are invited to visit CoStar's main booth at C192 Central Hall.)
About the International Council of Shopping Centers
Founded in 1957, ICSC is the premier global trade association of the shopping center industry. Its more than 55,000 members in over 90 countries include shopping center owners, developers, managers, marketing specialists, investors, retailers and brokers, as well as academics and public officials. As the global industry trade association, ICSC links with more than 25 national and regional shopping center councils throughout the world. For more information, visit www.icsc.org.
About CoStar Group, Inc.
CoStar Group, Inc. (Nasdaq:CSGP) is the number one provider of information, marketing and analytic services to commercial real estate professionals in the United States as well as the United Kingdom. CoStar's suite of services offers customers access via the Internet to the most comprehensive database of commercial real estate information throughout the U.S. as well as in the United Kingdom and France. Headquartered in Bethesda, Md., CoStar has approximately 1,400 people working for the company worldwide, including the largest professional research organization in the industry. For more information, visit http://www.costar.com.