It’s almost here. The ICSC Convention is just weeks away and we’re busy making appointments and replying to party invitations. I’ve been doing this a long time, but I think with the expanded exhibit floor space it’s gonna be an adventure this year just trying to figure out who’s where and getting around on the tram. Record attendance is expected, so add more bodies to a new layout with more floor space to cover; that’s a recipe for chaos, hopefully controlled chaos. To help you get the lay of the land, we’ve included a floor plan of the exhibitors so you can map out where you need to go during the show before you get to Vegas. Check out pages 128 to 131 for the floor plan. Of course, we’ve highlighted our advertisers’ booths, so make sure you drop by their booths and see what kind of opportunities they have.

I think the convention will be extremely productive, even though I know that at least one of my appointments will get blown because of logistics – either I won’t be able to find their booth or they won’t be able to find mine. Every year, I bring up that having back-to-back meetings at the Vegas show is a foolish idea; it’s important to walk the floor, too. This year, I’ve gotten myself jammed up with appointments, but luckily most of them are at our booth so I won’t have to schlep a million miles too often. Our booth is S2916 29^th Avenue, so stop by and say hello.

Getting back to my opening line, I think the show will be productive because 1) the retail real estate industry and retailers seem to be holding steady 2) there are lots of new construction projects being pitched, and it’s a lot easier to lease a proposed site than it is to lease the one that’s been vacant for three years and the parking lot looks like a mine field riddled with pot holes and 3) there’s lots of funding available from private equity groups and traditional lenders still have a green light for retail real estate deals.

To back up my claim that retailers (they’re the locomotive to our industry) are doing well for the most part, I poked around to see how many retail chains filed bankruptcy in the past year. Not too many, but there’s been a few, including 99 Cent Stuff, a small chain of 18 stores, and, most recently, Hancock Fabrics. Last year, the notables were Pro Golf of America, Inc., which, at its filing, had 115 franchised stores. Its bankruptcy was brought about by a judgment against the company for a wrongful termination suit. Also, the Rowe Companies liquidated its chain of furniture stores that traded as The Rowe, Home Elements and Storehouse, and, additionally, Copeland’s filed with The Sports Authority buying most the chain’s 30 stores.

According to my quick scan, there is around 16 million sq.ft. of retail space coming back on the market from just 15 chains. Longs Drugs Stores is closing 31 locations, but they’re also opening 30 stores. Borders is shutting down 300 or so of its Waldenbooks stores. Of course, Hancock Fabrics is disposing of stores in its bankruptcy and the initial figure is around 100 stores marked for closure. Tweeter Entertainment is puttin’ the "gone fishing" sign on 49 locations and CompUSA is closing approximately 125 stores. Big Lots closed or is in the process of shutting down about 170 locations. Rex has a list of store closures, too, with around 60 locations marked for the chopping block. After I listed all this bad news, how can I possibly say that retailers are doing fine? Because these closures aren’t causalities of a bad economy. It’s either because the retailer was a lousy merchant or because their industry has changed radically.

Best Buy hasn’t taken its eyes off their competition and they’ve hurt a lot of other electronics chains, but they must being doing something right since they’re expanding in the states and setting their sights on growing the company in China, too. Hancock Fabrics is a fading retail category, since most women don’t make their own clothes and crafting isn’t as popular as it once was. I also think changes in the bankruptcy code have made it really and truly the last alternative. Most retailers that have gotten into trouble during the past few years sell themselves to their competitor or to a merchant bank rather than attempting to endure a bankruptcy. However, Eddie Bauer come out of bankruptcy a while ago and its stockholders turned down a potential buyer just last month.

A few more chains may have some massive store closings coming down the pike, including Pier 1 Imports, which may close 250 to 300 stores due to weak performance. In addition, Rite Aid could possibly shut down upwards of 300 stores as part of its acquisition of Eckerd. Add to that the potential mergers of Ahold and Delhaize, the parent companies of Stop & Shop, Giant, Tops, Food Lion, Hannaford and Kash’n Karry, which would definitely require some trimming of store counts in overlapping markets. Plus, Dollar General’s acquisition by affiliates of Kohlberg Kravis Roberts & Co. L.P., subject to approval by DG shareholders, could cause more cost cutting and store closings. But these closing won’t cause landlords to start jumping out of the proverbial window, it’ll just take some time to find a replacement tenant. Far from the end of the world. You guys should chisel this in stone because I rarely make positive statements, since I spend most of my time being the pessimist. Just ask anybody who’s known me more than five minutes and they’ll concur.

As to new construction, there are lots of projects in the pipeline from coast to coast. A significant percentage of these new centers will be mixed-use with lots of partners involved. They’re bringing together office developers, residential builders and shopping center developers to pool their expertise and to spread the risk. The lenders are still saying, "We’ll loan ya money for your center," and retailers are signing deals, so we should definitely enjoy the wave until the economy stalls. Buyers are still hungry to add to their retail portfolios and most sellers are still getting their asking price or at least close to it.

Oh, getting off track – Josh went to the Retailer One on One conference last month in Orlando, which had a really good turnout, even though crazy weather delayed or canceled a lot of flights. I was supposed to be in Orlando, but at the last minute had a meeting in Chicago, so I sent Josh to Orlando only to have my flight to Chicago canceled. Now instead of getting together in the Windy City, we’re meeting in Vegas. Delay, delay, delay. Unfortunately, that’s the biggest problem we have in this business, everything takes five times longer to do than it should. But, Josh was a happy camper talking up our sites to hundreds of retailers at the show and he went out early to attend their golf tournament. I don’t golf, but he did make some good contacts on the links. (So, I guess those expensive golf lessons in high school are paying off.)

Well my parting words of advice for this year’s ICSC Convention are to work as hard as you play in Vegas. Yep, make sure you hit every cocktail party that you’re invited to, and if you’re a newbie and your dance card is empty, crash the ones that you can. The parties and hanging out at the bars after the show are where you’ll make contacts with people that you probably won’t meet during the 9-to-5 grind on the show floor and they’ll definitely be in a better mood with a drink in hand. I know that some of the guys I spent time drinking with 30 years ago are the people that I can call today and get some fast answers, whether it’s to ask them about market rents in their area or what kind of rent a tenant paid in their last deal, etc. Networking is what the convention is for. Here’s to lots of deals and a good time.

See you there,