Positive Signs Emerge for the Retail Industry

By admin • August 25, 2009

NORTH PLAINFIELD, N.J., July 30, 2009 – The economic news continues to be dominated by negative headlines, but Levin Management Corporation reports there are positive signs that the retail business is ready for a turnaround. Heightened leasing activity by the retail real estate services firm during the first half of 2009, coupled with new construction tied to shopping center repositionings provides the evidence.

“Better things are happening,” said Levin President and Chief Operating Officer Matthew K. Harding. “All things considered, our properties have been doing pretty well through this cycle, and we are encouraged by what we’re seeing right now.”

The signs include a total of approximately 262,000 square feet of leasing activity at Levin properties during the first seven months of the year, involving 48 transactions and 24 shopping centers in four states. Much of that activity has occurred in New Jersey. In addition, a number of Levin’s retail properties in Pennsylvania, New York and North Carolina are also experiencing increases in activity.

“Our portfolio totals more than 12.5 million square feet, which gives us a broad-based reading of conditions across a number of key markets,” Harding said. “The number of renewals and extensions suggest that tenants are taking advantage of the market to lock in at favorable rates. It also speaks to their confidence.”

“We are starting to see an increase in new leases as well,” he continued. “This is good news, indicating that the cycle is coming around. The timing remains unclear, but we are increasingly confident that it will get better.”

On the construction side, work currently underway as part of major repositionings at the 268,000-square-foot Post Road Plaza in Pelham Manor, N.Y. and the 317,471-square-foot St. Georges Crossing in Woodbridge, N.J., are providing the impetus for hundreds of new jobs. New tenants coming into the two properties are expected to add upwards of 500 permanent jobs, and ongoing construction activity has totaled approximately 250 jobs. When considering other renovation projects in Levin’s portfolio, the construction job total rises to more than 400.

“We’re seeing positive energy at both construction sites,” Harding said. “That is a very welcome change from the negative reports we continue to hear about the economy. In good economic times, a ribbon-cutting is very often taken for granted. In this economy, it is a very real cause for celebration.”

Renovation and activity at the two-story Post Road Plaza has been especially significant. At the onset of the repositioning, Fairway Market signed a new 75,000-square-foot lease to anchor the property, joining existing tenants Modell’s, Dress Barn, AJ Wright, Mandee, and GNC, among others.

The renovation at St. Georges Crossing, meanwhile, is the culmination of a decade-long effort to reposition the property after Caldor vacated its two-floor operation. The Shannon Rose Irish Pub is the latest to open at the property, joining a 91,000-square-foot ShopRite supermarket, P.C. Richard & Son, PETsMART, Taco Bell, Bertucci’s, Pier 1 Imports and GameStop, among others.

“It is very gratifying to see the work taking place at both properties, as well as renovations elsewhere within our portfolio,” Harding said. “The new construction, combined with the leasing activity we’ve seen, is very encouraging.”