Strip malls depend on nail salons and Dollar stores. As the economy tanks, the Dollar stores will thrive and multiply--not sure about elasticity of nail polish demand.
I live just south of Chattanooga, TN, and a large portion of my (too long) commute is along a major "business district" thoroughfare.
Because the issue was raised here about a year and a half ago, I started paying attention to multi-store front occupancy along the way - nothing scientific, just general impressions.
Back then, most of the fronts were occupied, with no real pattern to the vacancies.
On March 1st of this year, I realized that with one exception, every multi-front with more than four potential stores had at least one vacancy. The exception was a case of all four stores belonging to one local family -- long-term businesses.
Last week, two of those stores closed. My impression is that more of the fronts (besides that) have closed. Oh, and two of the strips themselves are now completely for sale as of sometime in the last couple of weeks.
I have no clue what national levels are like, but local is ugly already.
The company, which is now majority-owned by private equity firm Cerberus Capital Management, bought ResCap debt with a face value of $1.2 billion in the open market for just $607 million, according to a recent filing with the Securities & Exchange Commission. The price reflects widespread uncertainty about ResCap's prospects for survival amid the U.S. housing downturn and credit crisis.
ok.... private homeowners are unallowed to bid on there own mortgage debt that's traded in the otc market, but a business can....
is there any wonder why consumer's feel it's ok to walk?
I don't know strip malls will do any better or worse than other types of retail space.
The main difference is that strip malls have more locally-owned and independent businesses (not big companies, chains or franchises).
To open a typical new storefront, a local business has to spend $50,000 to $100,000 on leasehold improvements. Most small business people don't have that much cash. They have to borrow it.
They can amortize improvements over the life of the lease or life of the improvement, whichever is shorter. So, they can show banks an income statement that looks good with the improvements factored in over 10-15 years.
But if banks aren't lending, it's no go. Until banks start lending again to small retail biz, there won't be much strip mall absorption. Too many banks like Willow got blinded by real estate and neglected the needs of local business communities. Now, everybody pays for their failures.
Are all Fed presidents as dumb as this guy?
Anonymous
At least you seem to have found compensation for your own shortcomings. It's still better to work on and overcome them instead of dwelling in other peoples' (perceived) failings. Although that seems to be a favorite pastime of CR readers.
O-Joe
I'm thinking of opening a chain of Internet Nickname stores for those poor unfortunate anonymice needing distinctive handles. I'll call them "A Rose By Any Other Name"
"Bob Dobbs writes:
Mattress discounters! Kung fu studios! Insurance agencies! Pet groomers! Coin dealers: Welcome to the future of the American strip mall!
You left out pawn shops and possibly porn shops too...
Gary Denner, a partner in the Gem Pawnbroker's new Hicksville shop, expects it to draw upper-income and working-class Long Islanders. The shop is near the train station and a check-cashing service.
"Look at the people at Bear Stearns," Denner said. "Some of these people have huge expenses and they live very high. Banks aren't giving loans that easily anymore."
I own a small strip in the outer burbs of northern virginia (my business, which is the anchor, relies on discretionary income was down 25% 2007 over 2006). Thankfully, I'm 100% leased.
Talking to the tenants everyone has seen double digit declines (except for an IT store that caters to businesses). Though the leases are escalated yearly based on the CPI, I didn't increase this year in order to help everyone ride out the slowdown.
One of the tenants after hearing this good news told me that they had been approached by one of the new large strips about relocating. They told them they couldn't touch what they are paying in rent (I've first hand knowledge there asking/were getting 50% more when figuring in triple net). Damn, if they didn't match. But they said no thanks, they love where they are.
I expect to see many marginal businesses not make it to 2009 as they burn through their reserves in 2008 (and 2007) waiting for the turnaround. A few here have already bitten the dust.
WaMu's getting $5B from PE? Chainsaw juggling, the opening act for the coming protracted deep recession. And the bubbleheads on CNBC that were screaming BUY in early 2001 are cooing.
The number of payday loan storefronts in my area (semi-rural OR coastal) has decreased since the OR legislature passed a law limiting payday loan interest to 30 something %. But the number of used car sales lots along the highway seems to have increased (or maybe it's just the size of the lots?) as have the # of cars parked in lots (beach access, Walmart, Safeway, & strip mall parking lots, etc.) facing the highway w/"for sale" signs taped to the windshields. More recent models seem to be for sale. I'm seeing more notices of trustee deed sale (foreclosure) in the legal notices section as well as an increasing number of auction sales of contents of storage lockers because of unpaid rent.
But a month or so ago, the editor of the local (booster) paper, informed the reading public that Lincoln County (which typically has had a higher unemployment rate than the rest of the state) was doing just fine, would continue to do just fine--partly because it has a higher % of "transfer" payments than the rest of the state (i.e, benefits, retirement or payments tied to the CPI, not the real rate of inflation)--and there was a recession only if people BELIEVED there was one. Guess we're just supposed to close our eyes, click our heels & close our eyes & wish. Where's that good witch when you need her?
ees Bruggemans, the chief economist for the First Rand National Bank in South Africa, refers to "$US2 trillion paper" that global and US banks hold but cannot unload, the result of "what was effectively a parallel unregulated banking system".
Mr Krugman, the New York Times columnist, writes of "the shadow banking system" that used "complex financial arrangements to bypass regulations designed to ensure that banking was safe".
The phenomenon of houses in solid neighbourhoods abandoned, with their keys left on the front veranda, is not unique. It occurred in Denver, Colorado, in the mid 1980s, where, within 12 years there was recovery and a return to ridiculous real estate prices again. But that was an economic cycle of a mineral-driven, boom-and-bust city. This time, according to the Centre for Economic and Policy Research's Dean Baker, it is a social and cultural commentary.
"I wouldn't say it's a breakdown of the culture," he says. "Society is run on norms, and in the US culture in the last 20 years the norm has been to rip off everything you can. When they [the affected home owners] see people in the banks and financial institutions making billions a year, then their attitude will be 'Too bad for them if they couldn't get their business to work'.
The symptoms of this epidemic are wide-ranging and sustained, touching everyone from institutions to home owners, to political aspirants.
Mr Baker says the banking landscape, which now numbers 7400 such entities, will change. "You're talking about a large amount of defaults, way beyond any historical pattern," he says. "I would be surprised if you don't have a lot of banks fail."
Gerard Cassidy, a senior researcher with RBC Capital Markets, predicts 150 bank failures over the next three years. The Federal Deposit Insurance Corp, which guarantees deposits held by commercial banks, announced last week it would add 140 staff - an increase of almost 50 per cent - to its division that handles bank failures.
But paying the loans as housing prices fall is all too hard, and many economists believe that foreclosures will continue to rise.
The collapse will affect other markets, like New York, Boston and D.C., said Dean Baker, co-director of the Center for Economic and Policy Research. Suburban areas near those cities are already seeing prices plunge.
During the next two to three years, U.S. bank failures will likely increase dramatically from the low levels recorded from 2004 to 2007, as credit problems mount for the industry, a RBC Capital Markets analyst said.
"We anticipate upwards to 150 banks will fail over the next two years. Banks that deplete their capital through rising credit losses are most vulnerable to failure," Gerard Cassidy said.
"As we move deeper into 2008, we expect to see economic growth grind to a halt with recessionary pressures mounting as the year progresses,"
We actually have a couple of semi-dead neighborhood malls that were outcompeted by nearby developments and withstood the efforts of several owners to resusitate. And yes, really, kung fu, coins, insurance, etc.
All I can say is, when the scrap-booking supply store and the nondenominational church move in... it's dead, Jim.
I live in a place where a small strip mall is trying to go up very slowly and the developer is a realtor who is sending out mailers asking nearby homeowners what kind of stores they would like to see there (shop at), as no one besides him is willing to risk capital in an unproven location, which is turning colder by the day.
People still hitting the plastic...although it seems to be slowing:
WASHINGTON (MarketWatch) -- U.S. consumers once again took on more credit card debt in February, pushing up total seasonally adjusted consumer debt for the month. Total consumer credit increased by $5.2 billion, or a 2.4% annual rate, to $2.54 trillion, the Federal Reserve reported Monday. Of the total increase, credit card debt rose by 6% and accounted for $4.7 billion. Nonrevolving credit like student and auto loans climbed by 0.4%, or $496 million, the Fed said.
Re: ox tells us that there is much less inequality in consumption than income, so therefore we should not really be concerned about inequality. I won't go through all the problems in Cox's analysis (there are many). I will just point out that the data set that he uses, the consumer expenditure survey (CEX) is not very well-suited for this sort of analysis.
The CEX misses a great deal of consumption. This can readily be seen by simply looking at the aggregate statistics. The average after-tax income reported in the survey is $58,101. Average consumption expenditures are $48,398. This implies a savings rate of 16.7 percent. The National Income and Product Accounts data show a savings rate of less than 1 percent. This suggests that the CEX is missing a great deal of consumer expenditures, which makes this sort of analysis very dubious.
You may wonder why the NYT would print columns from someone with such a consistent reputation for getting things wrong. I guess that is the price that we pay for having a regular column from Paul Krugman. Too bad they can't find a conservative who could at least make an honest argument.
April 7 (Bloomberg) -- Wall Street is pressing the Federal Reserve to take bonds backed by student loans as collateral in its new lending facility to stem a slump in demand for the debt that's driving lenders to stop writing loans
"The private sector is shedding jobs at the rate of almost 100,000 per month."
The retail sector lost 12,400 jobs in March and has lost 100,000 since November.
he health care and restaurant industries are the only parts of the private sector with strong job growth, adding 22,800 jobs and 23,400, respectively.
The job growth in the restaurant sector may be an illusion. Over the last four months, the Labor Department has shown a gain of 58,100 jobs. However, the imputation for new firms not captured by the survey has been even larger at 85,000. The Labor Department is imputing jobs in this sector at close to the same rate as it did last year when the economy was growing much more rapidly, which means that it is likely overstating job growth.
The unemployment rate for workers without high school degrees jumped 0.9 percentage points to 8.2 percent, the highest rate since October of 2004. The unemployment rate for workers with high school degrees rose by 0.4 pp to 5.1 percent, while the EPOP dropped by 0.6 pp to 59.1 percent. This is the lowest EPOP for workers with high school degrees since the Labor Department changed the coding in the survey in 1992.
With real wages declining, and the plunge in house prices destroying home equity at more than a $2.5 trillion annual rate, it is likely that the rate of job loss will accelerate in the months ahead.
Gasoline for May delivery rose 2.68 cents, or 1 percent, to settle at a record $2.7835 a gallon in New York. Futures reached $2.7978, an intraday record for gasoline to be blended with ethanol, known as RBOB, which began trading in October 2005.
bout time. think engyecon predicted this one. the cracak spread foretold.
January 4, 2008, 6:50 pm
Employment: a tale of two administrations
For some perspective on the jobs picture, heres the employment-population ratio the percentage of adults with jobs since the beginning of the Clinton administration.
azurite writes:
"...there was a recession only if people BELIEVED there was one."
Yes, I've already read somewhere that consumers are becoming hesitant to spend because all the talk of recession in the media is scaring them. Nevermind that some consumers have an exploding ARM, upside down mortgage, maxed HELOC, maxed credit card, upside down on car loan, and spouse just lost his/her other part-time job.
I wonder which companies that miss earnings this quarter will blame it on the 'pessimistic' media causing a recession?
Alcoa on Monday kicked off the first earnings season of the year with what will likely become a familiar refrain of falling profit amid poor demand from top industrial customers, surging energy costs and a weak U.S. dollar.
The New York-based aluminum giant handed in a first-quarter profit of $303 million, or 37 cents a share, down from $632 million, or 75 cents a share, in the same period a year ago.
Excluding restructuring and tax-related items, Alcoa (AA:alcoa inc com
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AA 37.50, -1.50, -3.8%) posted income from continuing operations of $361 million, or 44 cents a share.
Revenue came in at $7.4 billion, down from $7.9 billion a year earlier due to the sale of its packaging and consumer business.
Analysts polled by Thomson Financial were looking for a profit, on average, of 48 cents a share on $7.2 billion in sales.
"Upstream margins were squeezed by higher energy costs and a weaker U.S. dollar, but the global market remains tight and prices are near historic highs, primarily driven by demand in Asia, especially China," Chairman and CEO Alain Belda said in a statement.
Alcoa's report is seen as ushering in another rough period for corporate results, with earnings for S&P 500 companies seen declining 10.9% from the year-ago period, according to Wall Street targets. Still, that's an improvement from the showing they made in the fourth quarter when earnings fell 25.1%, the worse quarterly performance since at least 1991. See full story
OT history post on 3% decline in GDP over the next few years;
Re: A brief recession occurred in 1980. Several key industriesincluding housing, steel manufacturing and automobile productionexperienced a downturn from which they did not recover through the end of the next recession. Many of the economic sectors that supplied these basic industries were also hard-hit.[7]
Determined to wring inflation out of the economy, Federal Reserve chairman Paul Volcker slowed the rate of growth of the money supply and raised interest rates. The federal funds rate, which was about 11% in 1979, rose to 20% by June 1981. The prime interest rate, at the time a highly important economic measure, eventually reached 21.5% in June 1982.
y mid-1982, the number of bank failures was rising steadily. Bank failures reached a post-depression high of 42 as the recession and high interest rates took their toll.[10] By the end of the year, the Federal Deposit Insurance Corporation (FDIC) had spent $870 million to purchase bad loans in an effort to keep various banks afloat.[11]
Congress reacted with a distinctly inappropriate piece of legislation. In July 1982, Congress enacted the Garn-St. Germain Depository Institutions Act of 1982 (Garn-St. Germain), which further deregulated banks as well as deregulating savings and loans. The Garn-St. Germain act authorized banks to begin offering money market deposit accounts in an attempt to encourage deposit in-flows, removed additional statutory restrictions in real estate lending, and relaxed loans-to-one-borrower limits. The legislation encouraged a rapid expansion in real estate lending at a time when the real estate market was collapsing, worsened competition between banks and savings and loans, and encouraged overbuilding of branches.[9]
The recession affected the banking industry long after the economic downturn technically ended in November 1982. In 1983, another 49 banks failedeasily beating the Great Depression record of 43 failures set in 1940. The Federal Deposit Insurance Corporation (FDIC) listed another 540 banks as "problem banks" on the verge of failure
What cost $870,000,000 in 1982 would cost $1,960,722,101 in 2007.
Also, if you were to buy exactly the same products in 2007 and 1982,
they would cost you $870000000 and $396840122.99 respectively.
Weird OT and Off Topic and weird, but related to how some people never listen to reality:
Graduates Hear Vonnegut On When It's Honorable To Be A 'Wise Guy'
A (Real) Commencement Address
he following remarks are from a speech at the Southampton College commencement last month by the writer Kurt Vonnegut Jr., who has a home on the East End.
When my father was a little boy, Louis Pasteur was still alive and still plenty controversial. There were still plenty of high-powered guessers who were furious at people that would listen to him instead of to them. Yes, and Ignaz Semmelweis also believed that germs could cause diseases. He was horrified when he went to work for a maternity hospital in Vienna, Austria, to find out that one mother in 10 was dying of childbed fever there.
These were poor people - rich people still had their babies at home. Semmelweis observed hospital routines, and began to suspect that doctors were bringing the infection to the patients. He noticed that the doctors often went directly from dissecting corpses in the morgue to examining mothers in the maternity ward. He suggested as an experiment that the doctors wash their hands before touching the mothers.
What could be more insulting. How dare he make such a suggestion to his social superiors. He was a nobody, he realized. He was from out of town with no friends and protectors among the Austrian nobility. But all that dying went on and on and Semmelweis, having far less sense about how to get along with others in this world than you and I would have, kept on asking his colleagues to wash their hands.
They at last agreed to do this in a spirit of lampoonery, of satire, of scorn. How they must have lathered and lathered and scrubbed and scrubbed and cleaned under their fingernails. The dying stopped - imagine that! The dying stopped. He saved all those lives.
Subsequently, it might be said that he has saved millions of lives - including quite possibly yours and mine. What thanks did Semmelweis get from the leaders of his profession in Viennese society, guessers all? He was forced out of the hospital and out of Austria itself, whose people he had served so well. He finished his career in a provincial hospital in Hungary. There he gave up on humanity, which is us, and our knowledge, which is now yours, and on himself.
One day in the dissecting room, he took the blade of a scalpel with which he had been cutting up a corpse, and he stuck it on purpose into the palm of his hand. He died, as he knew he would, of blood poisoning soon afterward.
The guessers had had all the power. They had won again. Germs indeed. The guessers revealed something else about themselves too, which we should duly note today. They aren't really interested in saving lives. What matters to them is being listened to -as however ignorantly their guessing goes on and on and on. If there's anything they hate, it's a wise guy or a wise girl.
The Great Depression record of failures was not 43 failures in 1940. The FDIC, for one, says: ". . .a liquidity crisis caused the failure of 2,293 banks in 1931. . . " in the second paragraph here.
Also, the prime rate was not 21.5% in 1982--although it was that high in December 1980. You remember 1980. Jimmy Carter was president. Remember him? Read all about it here. (Scroll down to the Economy section.)
Where are you getting your so-called "facts?" Wherever you are, Scotty, you're not in history class.
Retail is ferociously competitive here in CA. Malls are always opening and buzzing for a few years. The the next great thing opens up down the street and the now "old" one looks like somebody phoned in a bomb threat. I don't understand how the cycle is profitable. Do they really make all their investment back before the malls lose their customers?
The cost of construction for recent strip malls is way too high because of land, labor, and material costs. They could pencil when the economy was booming even though returns were rather paltry by historical standards. However, in an enviroment of a severe recession, failing businesses, and falling rents, the new strip malls are doomed. People who bought older strip malls between 2003 and 2007 are doomed, because they paid too much at crazy cap rates. There will be a trail of devastation in retail space over the next few years.
Gasoline for May delivery rose 2.68 cents, or 1 percent, to settle at a record $2.7835 a gallon in New York. Futures reached $2.7978, an intraday record for gasoline to be blended with ethanol, known as RBOB, which began trading in October 2005.
In the 30s we had Hoovervilles, maybe in the 2010s we'll have Bernankemobiles.
"In the 30s we had Hoovervilles, maybe in the 2010s we'll have Bernankemobiles."
Sure: big guerrilla communities of stationary RVs and camper vans that nobody can afford to fuel anymore. Put 'em up on blocks, steal some batteries, elect a "mayor" and it's the '30s again, only with in-dash 5-CD changer and iPod connection.
There is ample BSC-like optimism across the board on Wall St. Looks like every coming collapse will be a weekend drop to zero. So much for the highly efficient discounting mechanism. How many more NEW, FMT, BSC... wipeouts will it take to finally sink in?
Good post. The competition matching your rate is just a form of survival. The weak will get slaughtered and whomever remains standing will get stronger. And yes, 2009 will be brutal as most reserves and hope will ulitmately be burned up by then.
"At least you seem to have found compensation for your own shortcomings. It's still better to work on and overcome them instead of dwelling in other peoples' (perceived) failings. Although that seems to be a favorite pastime of CR readers.
O-Joe"
Another dope who just doesn't get his own hypocrisy. Idiot! Who are you? Rosengren? Idiot!
From Roubini this morning:In 2001 it was the corporate sector (10% of GDP or real investment) to be in trouble. Today it is the household sector (70% of GDP in private consumption) to be in trouble. The US consumer is shopped out, saving-less, debt burdened (debt being 136% of income) and buffeted by many negative shocks: falling home prices, falling home equity withdrawal, falling stock prices, rising debt servicing ratios, credit crunch in mortgages and increasingly consumer credit, rising oil and gasoline prices, falling employment (now for three months in a row), rising inflation eroding real incomes, sluggish real income growth.
Should be a good time to buy a shopping mall REIT -in about 2 or three years if they haven't converted them to senior living centers.
Sure: big guerrilla communities of stationary RVs and camper vans that nobody can afford to fuel anymore. Put 'em up on blocks, steal some batteries, elect a "mayor" and it's the '30s again, only with in-dash 5-CD changer and iPod connection.
Bob Dobbs | Homepage | 04.07.08 - 5:01 pm | #
Kinda like Woodstock only with varicose veins & defibrillators. Wanna see my tattoo - it used to be up here now its down there...
Never understood why Zell wanted to get into the newspaper business, but even if he renames...what's that Northside field called again?...he may not have enough money to pay his debt.
Not just consumers...but companies with credit lines are having problems...
I'm hearing that too - companies that didn't worry about cash flow 'cause their balance sheet was 'excellent' & they could always 'borrow against their equity in a pinch' are all of a sudden in a pinch and having to change strategy to maximize cash flow.
I'm just a peon... (or is that pion)... and don't get told the whole poop but I can guess whatzup - now they have to run their businesses like... well, like a business.
Shouldn't take a Wharton MBA to know that in the first place...
Out here in Salem and Portland Oregon, there are a lot of signs of the coming retail apocalypse.
In an older local mall anchored by Rite Aid, Firestone, Starbucks, seven stores have closed since Christmas. Across the river at a new, local mall in a high income area... full occupancy... Windermere Realty, two restaurants, a furniture store, a toney kid's hair cutting place, etc.... talked to most all the principals.. all hoping business gets better, or they're looking at closing, perhaps by the end of the year.
Several abandoned CRE developments on Highway 99, ten or so in a 50 mile drive.
But hey, it's 'different here' and other places will get affected by the downturn, certainly not us.
Fifty percent vacancy by 2009? Hmm... seems high, but... think I'd rather dwell on the faults of others.
Later.
wner purchased this successful salon 1 year ago and it has continued to grow and prosper. She bought new equipment and upgraded spending over $130k. 5 nail stations, 2 nail techs, 4 spa pedicure stations, 5 hair stylists/5 stations. Long Time Employees! Owner works 6 days, including Sundays with one other employee, the demand is there. Great lease and landlord! No deposit on the lease. She is making money. Very busy strip mall on busy corner! Good books and records!
Employment Boom in Post Housing Bubble & Strip mall FYI:
Long John Silver's (YUM) Store Owners Say Their Weekly Specials Don't Help Business
Long John Silver's, America's fried seafood restaurant chain, was surveyed by Tickermine this month. 24 stores were consulted about their specials for that week, whether these have generated more business, what was the most popular menu item, is the store near a mall and which restaurant was their closest competitor.
Lunch was the more popular mealtime apparently with 17 respondents, or 71%, and dinner was cited 7 times, or 29%. Lobster Bites were the new special for this week for 13 stores or 54% followed by the Family Chest Treasure Pack and the Value Basket Combos each with 3 respondents, or 12%. Crab cakes were cited by one party, or 4%, and 4 representatives, or 16%, reported having no special items this week.
do you have any historical context or graph to put these numbers against so we can see where we are relative to a recession, or relative to the beginnings of a recession, or maybe where we were in 1991 which is much more interesting than a 1996 level.
First.
It'll get higher.
second
chain store massacre
RE-it
Slim chance any close above 1375
The article hints at the distribution being uneven-- the hardest hit are non-REIT, non-regional, non-trendy strip malls...
Strip malls depend on nail salons and Dollar stores. As the economy tanks, the Dollar stores will thrive and multiply--not sure about elasticity of nail polish demand.
Malls are packed in my area. (NE PA and NJ) Can't find parking and always having to queue up for a long time at checkout.
"Sales Associate Wanted" signs are also plentiful.
Something's disconnected about my area?
HC, go to this weekends Fry's topic to understand the 'mall walker' syndrom.
Fry's topic? Can you post a link?
Thanks.
data point or anecdote as you desire...
I live just south of Chattanooga, TN, and a large portion of my (too long) commute is along a major "business district" thoroughfare.
Because the issue was raised here about a year and a half ago, I started paying attention to multi-store front occupancy along the way - nothing scientific, just general impressions.
Back then, most of the fronts were occupied, with no real pattern to the vacancies.
On March 1st of this year, I realized that with one exception, every multi-front with more than four potential stores had at least one vacancy. The exception was a case of all four stores belonging to one local family -- long-term businesses.
Last week, two of those stores closed. My impression is that more of the fronts (besides that) have closed. Oh, and two of the strips themselves are now completely for sale as of sometime in the last couple of weeks.
I have no clue what national levels are like, but local is ugly already.
The company, which is now majority-owned by private equity firm Cerberus Capital Management, bought ResCap debt with a face value of $1.2 billion in the open market for just $607 million, according to a recent filing with the Securities & Exchange Commission. The price reflects widespread uncertainty about ResCap's prospects for survival amid the U.S. housing downturn and credit crisis.
ok.... private homeowners are unallowed to bid on there own mortgage debt that's traded in the otc market, but a business can....
is there any wonder why consumer's feel it's ok to walk?
GMAC Pays $607 Million in ResCap Debt | Financial Services | Financial Articles & Investing News | TheStreet.com
hc
Calculated Risk: Maricopa: Do It For the Children
Fed's Rosengren Calls Delay in Housing Recovery a `Surprise'
- Bloomberg.com
"Rosengren said it's ``confounding'' that housing shows little sign of recovery after the Fed's six interest-rate reductions since September."
Are all Fed presidents as dumb as this guy?
I don't know strip malls will do any better or worse than other types of retail space.
The main difference is that strip malls have more locally-owned and independent businesses (not big companies, chains or franchises).
To open a typical new storefront, a local business has to spend $50,000 to $100,000 on leasehold improvements. Most small business people don't have that much cash. They have to borrow it.
They can amortize improvements over the life of the lease or life of the improvement, whichever is shorter. So, they can show banks an income statement that looks good with the improvements factored in over 10-15 years.
But if banks aren't lending, it's no go. Until banks start lending again to small retail biz, there won't be much strip mall absorption. Too many banks like Willow got blinded by real estate and neglected the needs of local business communities. Now, everybody pays for their failures.
Are there not any new Payday Loan companies being formed? Hell, they could fill that 7 or 8 percent by themselves.
Payday Loan Sharking companies represent one tenant in every strip mall everywhere I drive.
I've made it a game to find at least one strip mall without one, and so far, I've lost.
Strip Mall occupancy down?
*** Yawn ****
Wake me when Strip Club occupancy is down. That's when I know the bottom is hit.
This ain't gonna help:
Crude closes up $2.86, or 2.7%, to $109.09 a barrel
Mucho gracias Senor Ben.
Bernanke Bails Out Strip Malls, as Paulson Prints More Cash!
Are all Fed presidents as dumb as this guy?
Yes!
I don't know strip malls will do any better or worse than other types of retail space.
They're cranking those things out left and right where I am. Not sure why.
I wonder if it's money coming in via the REITs.
Are all Fed presidents as dumb as this guy?
Anonymous
At least you seem to have found compensation for your own shortcomings. It's still better to work on and overcome them instead of dwelling in other peoples' (perceived) failings. Although that seems to be a favorite pastime of CR readers.
O-Joe
Mattress discounters! Kung fu studios! Insurance agencies! Pet groomers! Coin dealers: Welcome to the future of the American strip mall!
"By the end of the year, the rate likely will reach or surpass 8 percent, Reis said."
By the end of the year the rate will be over 50%. Yes, that's how bad it is about to get. Period.
I've made it a game to find at least one strip mall without one, and so far, I've lost.
Drew | Homepage | 04.07.08 - 2:52 pm | #
I can show you a few here in Charlotte County...Problem is there are no tennants at all. Does that count?
Chris
...Fortune Tellers, Tanning Parlors, Recruiters...
I'm thinking of opening a chain of Internet Nickname stores for those poor unfortunate anonymice needing distinctive handles. I'll call them "A Rose By Any Other Name"
"Bob Dobbs writes:
Mattress discounters! Kung fu studios! Insurance agencies! Pet groomers! Coin dealers: Welcome to the future of the American strip mall!
You left out pawn shops and possibly porn shops too...
Pawn Shops - New Growth Industry
Good quote from above article
Gary Denner, a partner in the Gem Pawnbroker's new Hicksville shop, expects it to draw upper-income and working-class Long Islanders. The shop is near the train station and a check-cashing service.
"Look at the people at Bear Stearns," Denner said. "Some of these people have huge expenses and they live very high. Banks aren't giving loans that easily anymore."
Let me throw in my 2 cents.
I own a small strip in the outer burbs of northern virginia (my business, which is the anchor, relies on discretionary income was down 25% 2007 over 2006). Thankfully, I'm 100% leased.
Talking to the tenants everyone has seen double digit declines (except for an IT store that caters to businesses). Though the leases are escalated yearly based on the CPI, I didn't increase this year in order to help everyone ride out the slowdown.
One of the tenants after hearing this good news told me that they had been approached by one of the new large strips about relocating. They told them they couldn't touch what they are paying in rent (I've first hand knowledge there asking/were getting 50% more when figuring in triple net). Damn, if they didn't match. But they said no thanks, they love where they are.
I expect to see many marginal businesses not make it to 2009 as they burn through their reserves in 2008 (and 2007) waiting for the turnaround. A few here have already bitten the dust.
good news this. i will buy now as bottom is must be here.
WaMu's getting $5B from PE? Chainsaw juggling, the opening act for the coming protracted deep recession. And the bubbleheads on CNBC that were screaming BUY in early 2001 are cooing.
Whose $$$ is TPG betting with?
The number of payday loan storefronts in my area (semi-rural OR coastal) has decreased since the OR legislature passed a law limiting payday loan interest to 30 something %. But the number of used car sales lots along the highway seems to have increased (or maybe it's just the size of the lots?) as have the # of cars parked in lots (beach access, Walmart, Safeway, & strip mall parking lots, etc.) facing the highway w/"for sale" signs taped to the windshields. More recent models seem to be for sale. I'm seeing more notices of trustee deed sale (foreclosure) in the legal notices section as well as an increasing number of auction sales of contents of storage lockers because of unpaid rent.
But a month or so ago, the editor of the local (booster) paper, informed the reading public that Lincoln County (which typically has had a higher unemployment rate than the rest of the state) was doing just fine, would continue to do just fine--partly because it has a higher % of "transfer" payments than the rest of the state (i.e, benefits, retirement or payments tied to the CPI, not the real rate of inflation)--and there was a recession only if people BELIEVED there was one. Guess we're just supposed to close our eyes, click our heels & close our eyes & wish. Where's that good witch when you need her?
OT, FBI investigating insider mortgage fraud: Help - Page Not Found - Boston.com loan_fraud-surging_say_industry_fbi/
Hope that displays as a link for anyone who's interested.
ees Bruggemans, the chief economist for the First Rand National Bank in South Africa, refers to "$US2 trillion paper" that global and US banks hold but cannot unload, the result of "what was effectively a parallel unregulated banking system".
Mr Krugman, the New York Times columnist, writes of "the shadow banking system" that used "complex financial arrangements to bypass regulations designed to ensure that banking was safe".
The phenomenon of houses in solid neighbourhoods abandoned, with their keys left on the front veranda, is not unique. It occurred in Denver, Colorado, in the mid 1980s, where, within 12 years there was recovery and a return to ridiculous real estate prices again. But that was an economic cycle of a mineral-driven, boom-and-bust city. This time, according to the Centre for Economic and Policy Research's Dean Baker, it is a social and cultural commentary.
"I wouldn't say it's a breakdown of the culture," he says. "Society is run on norms, and in the US culture in the last 20 years the norm has been to rip off everything you can. When they [the affected home owners] see people in the banks and financial institutions making billions a year, then their attitude will be 'Too bad for them if they couldn't get their business to work'.
The symptoms of this epidemic are wide-ranging and sustained, touching everyone from institutions to home owners, to political aspirants.
Mr Baker says the banking landscape, which now numbers 7400 such entities, will change. "You're talking about a large amount of defaults, way beyond any historical pattern," he says. "I would be surprised if you don't have a lot of banks fail."
Gerard Cassidy, a senior researcher with RBC Capital Markets, predicts 150 bank failures over the next three years. The Federal Deposit Insurance Corp, which guarantees deposits held by commercial banks, announced last week it would add 140 staff - an increase of almost 50 per cent - to its division that handles bank failures.
But paying the loans as housing prices fall is all too hard, and many economists believe that foreclosures will continue to rise.
The collapse will affect other markets, like New York, Boston and D.C., said Dean Baker, co-director of the Center for Economic and Policy Research. Suburban areas near those cities are already seeing prices plunge.
I've made it a game to find at least one strip mall without one, and so far, I've lost.
Drew | Homepage | 04.07.08 - 2:52 pm | #
How about newly minted strip malls where the only occupant is a payday loan shark?
During the next two to three years, U.S. bank failures will likely increase dramatically from the low levels recorded from 2004 to 2007, as credit problems mount for the industry, a RBC Capital Markets analyst said.
"We anticipate upwards to 150 banks will fail over the next two years. Banks that deplete their capital through rising credit losses are most vulnerable to failure," Gerard Cassidy said.
"As we move deeper into 2008, we expect to see economic growth grind to a halt with recessionary pressures mounting as the year progresses,"
UPDATE 1-Some US banks face failure as credit problems mount-RBC
| Reuters
We actually have a couple of semi-dead neighborhood malls that were outcompeted by nearby developments and withstood the efforts of several owners to resusitate. And yes, really, kung fu, coins, insurance, etc.
All I can say is, when the scrap-booking supply store and the nondenominational church move in... it's dead, Jim.
I live in a place where a small strip mall is trying to go up very slowly and the developer is a realtor who is sending out mailers asking nearby homeowners what kind of stores they would like to see there (shop at), as no one besides him is willing to risk capital in an unproven location, which is turning colder by the day.
People still hitting the plastic...although it seems to be slowing:
WASHINGTON (MarketWatch) -- U.S. consumers once again took on more credit card debt in February, pushing up total seasonally adjusted consumer debt for the month. Total consumer credit increased by $5.2 billion, or a 2.4% annual rate, to $2.54 trillion, the Federal Reserve reported Monday. Of the total increase, credit card debt rose by 6% and accounted for $4.7 billion. Nonrevolving credit like student and auto loans climbed by 0.4%, or $496 million, the Fed said.
I like Dean today!
Re: ox tells us that there is much less inequality in consumption than income, so therefore we should not really be concerned about inequality. I won't go through all the problems in Cox's analysis (there are many). I will just point out that the data set that he uses, the consumer expenditure survey (CEX) is not very well-suited for this sort of analysis.
The CEX misses a great deal of consumption. This can readily be seen by simply looking at the aggregate statistics. The average after-tax income reported in the survey is $58,101. Average consumption expenditures are $48,398. This implies a savings rate of 16.7 percent. The National Income and Product Accounts data show a savings rate of less than 1 percent. This suggests that the CEX is missing a great deal of consumer expenditures, which makes this sort of analysis very dubious.
You may wonder why the NYT would print columns from someone with such a consistent reputation for getting things wrong. I guess that is the price that we pay for having a regular column from Paul Krugman. Too bad they can't find a conservative who could at least make an honest argument.
--Dean Baker
Beat the Press Archive | The American Prospect
Rosengren is no dummy:
FRBB: Meet the Economists- Eric S. Rosengren
But, it is amazing, the poor judgement or ridiculous public statements by these guys. Do these guys have no sense of shame or honor?
I guess you really do get corrupted over time, being part of the system.
Schmucks, shysters, and shylocks they are.
In other news, the Washington Post won six Pulitzers today (links available just about everywhere).
See, the real problem is that the name is misleading. If they were REAL STRIP malls, they'd have more business.
Cheers,♦
April 7 (Bloomberg) -- Wall Street is pressing the Federal Reserve to take bonds backed by student loans as collateral in its new lending facility to stem a slump in demand for the debt that's driving lenders to stop writing loans
OH PLEASE! This is nuts.
OT on strip malls, but somehow related:
April 4, 2008
By Dean Baker
"The private sector is shedding jobs at the rate of almost 100,000 per month."
The retail sector lost 12,400 jobs in March and has lost 100,000 since November.
he health care and restaurant industries are the only parts of the private sector with strong job growth, adding 22,800 jobs and 23,400, respectively.
The job growth in the restaurant sector may be an illusion. Over the last four months, the Labor Department has shown a gain of 58,100 jobs. However, the imputation for new firms not captured by the survey has been even larger at 85,000. The Labor Department is imputing jobs in this sector at close to the same rate as it did last year when the economy was growing much more rapidly, which means that it is likely overstating job growth.
The unemployment rate for workers without high school degrees jumped 0.9 percentage points to 8.2 percent, the highest rate since October of 2004. The unemployment rate for workers with high school degrees rose by 0.4 pp to 5.1 percent, while the EPOP dropped by 0.6 pp to 59.1 percent. This is the lowest EPOP for workers with high school degrees since the Labor Department changed the coding in the survey in 1992.
With real wages declining, and the plunge in house prices destroying home equity at more than a $2.5 trillion annual rate, it is likely that the rate of job loss will accelerate in the months ahead.
Are those things anything like nudist camps?
Gasoline for May delivery rose 2.68 cents, or 1 percent, to settle at a record $2.7835 a gallon in New York. Futures reached $2.7978, an intraday record for gasoline to be blended with ethanol, known as RBOB, which began trading in October 2005.
bout time. think engyecon predicted this one. the cracak spread foretold.
January 4, 2008, 6:50 pm
Employment: a tale of two administrations
For some perspective on the jobs picture, heres the employment-population ratio the percentage of adults with jobs since the beginning of the Clinton administration.
Employment: a tale of two administrations - Paul Krugman Blog - NYTimes.com
azurite writes:
"...there was a recession only if people BELIEVED there was one."
Yes, I've already read somewhere that consumers are becoming hesitant to spend because all the talk of recession in the media is scaring them. Nevermind that some consumers have an exploding ARM, upside down mortgage, maxed HELOC, maxed credit card, upside down on car loan, and spouse just lost his/her other part-time job.
I wonder which companies that miss earnings this quarter will blame it on the 'pessimistic' media causing a recession?
Just got IM that IMF has decided they will be selling gold reserves... Anyone else hear this?
sure there always selling, forward... just who's is it that there selling
Alcoa on Monday kicked off the first earnings season of the year with what will likely become a familiar refrain of falling profit amid poor demand from top industrial customers, surging energy costs and a weak U.S. dollar.
The New York-based aluminum giant handed in a first-quarter profit of $303 million, or 37 cents a share, down from $632 million, or 75 cents a share, in the same period a year ago.
Excluding restructuring and tax-related items, Alcoa (AA:alcoa inc com
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AA 37.50, -1.50, -3.8%) posted income from continuing operations of $361 million, or 44 cents a share.
Revenue came in at $7.4 billion, down from $7.9 billion a year earlier due to the sale of its packaging and consumer business.
Analysts polled by Thomson Financial were looking for a profit, on average, of 48 cents a share on $7.2 billion in sales.
"Upstream margins were squeezed by higher energy costs and a weaker U.S. dollar, but the global market remains tight and prices are near historic highs, primarily driven by demand in Asia, especially China," Chairman and CEO Alain Belda said in a statement.
Alcoa's report is seen as ushering in another rough period for corporate results, with earnings for S&P 500 companies seen declining 10.9% from the year-ago period, according to Wall Street targets. Still, that's an improvement from the showing they made in the fourth quarter when earnings fell 25.1%, the worse quarterly performance since at least 1991. See full story
Vermont Trader,
It is a constant a persistent rumor. Has been for years.
Cheers,
Even CR has a chart over @ http://bp0.blogger.com/_pMscxxELHEg/R5BBOVX1mlI/AAAAAAAABes/_l5BkxEr-jE/s1600-h/EmployPopRatio.jpg
So the Alcoa miss is bullish, right?
yes Alcoa miss bullish. too bad not miss by more then would greater bullish be.
So the Alcoa miss is bullish, right?
Billy Shears | 04.07.08 - 4:25 pm | #
Sure! It was a better miss than expected.
OT history post on 3% decline in GDP over the next few years;
Re: A brief recession occurred in 1980. Several key industriesincluding housing, steel manufacturing and automobile productionexperienced a downturn from which they did not recover through the end of the next recession. Many of the economic sectors that supplied these basic industries were also hard-hit.[7]
Determined to wring inflation out of the economy, Federal Reserve chairman Paul Volcker slowed the rate of growth of the money supply and raised interest rates. The federal funds rate, which was about 11% in 1979, rose to 20% by June 1981. The prime interest rate, at the time a highly important economic measure, eventually reached 21.5% in June 1982.
y mid-1982, the number of bank failures was rising steadily. Bank failures reached a post-depression high of 42 as the recession and high interest rates took their toll.[10] By the end of the year, the Federal Deposit Insurance Corporation (FDIC) had spent $870 million to purchase bad loans in an effort to keep various banks afloat.[11]
Congress reacted with a distinctly inappropriate piece of legislation. In July 1982, Congress enacted the Garn-St. Germain Depository Institutions Act of 1982 (Garn-St. Germain), which further deregulated banks as well as deregulating savings and loans. The Garn-St. Germain act authorized banks to begin offering money market deposit accounts in an attempt to encourage deposit in-flows, removed additional statutory restrictions in real estate lending, and relaxed loans-to-one-borrower limits. The legislation encouraged a rapid expansion in real estate lending at a time when the real estate market was collapsing, worsened competition between banks and savings and loans, and encouraged overbuilding of branches.[9]
The recession affected the banking industry long after the economic downturn technically ended in November 1982. In 1983, another 49 banks failedeasily beating the Great Depression record of 43 failures set in 1940. The Federal Deposit Insurance Corporation (FDIC) listed another 540 banks as "problem banks" on the verge of failure
What cost $870,000,000 in 1982 would cost $1,960,722,101 in 2007.
Also, if you were to buy exactly the same products in 2007 and 1982,
they would cost you $870000000 and $396840122.99 respectively.
Weird OT and Off Topic and weird, but related to how some people never listen to reality:
Graduates Hear Vonnegut On When It's Honorable To Be A 'Wise Guy'
A (Real) Commencement Address
he following remarks are from a speech at the Southampton College commencement last month by the writer Kurt Vonnegut Jr., who has a home on the East End.
When my father was a little boy, Louis Pasteur was still alive and still plenty controversial. There were still plenty of high-powered guessers who were furious at people that would listen to him instead of to them. Yes, and Ignaz Semmelweis also believed that germs could cause diseases. He was horrified when he went to work for a maternity hospital in Vienna, Austria, to find out that one mother in 10 was dying of childbed fever there.
These were poor people - rich people still had their babies at home. Semmelweis observed hospital routines, and began to suspect that doctors were bringing the infection to the patients. He noticed that the doctors often went directly from dissecting corpses in the morgue to examining mothers in the maternity ward. He suggested as an experiment that the doctors wash their hands before touching the mothers.
What could be more insulting. How dare he make such a suggestion to his social superiors. He was a nobody, he realized. He was from out of town with no friends and protectors among the Austrian nobility. But all that dying went on and on and Semmelweis, having far less sense about how to get along with others in this world than you and I would have, kept on asking his colleagues to wash their hands.
They at last agreed to do this in a spirit of lampoonery, of satire, of scorn. How they must have lathered and lathered and scrubbed and scrubbed and cleaned under their fingernails. The dying stopped - imagine that! The dying stopped. He saved all those lives.
Subsequently, it might be said that he has saved millions of lives - including quite possibly yours and mine. What thanks did Semmelweis get from the leaders of his profession in Viennese society, guessers all? He was forced out of the hospital and out of Austria itself, whose people he had served so well. He finished his career in a provincial hospital in Hungary. There he gave up on humanity, which is us, and our knowledge, which is now yours, and on himself.
One day in the dissecting room, he took the blade of a scalpel with which he had been cutting up a corpse, and he stuck it on purpose into the palm of his hand. He died, as he knew he would, of blood poisoning soon afterward.
The guessers had had all the power. They had won again. Germs indeed. The guessers revealed something else about themselves too, which we should duly note today. They aren't really interested in saving lives. What matters to them is being listened to -as however ignorantly their guessing goes on and on and on. If there's anything they hate, it's a wise guy or a wise girl.
re: scotty@ history class
The Great Depression record of failures was not 43 failures in 1940. The FDIC, for one, says: ". . .a liquidity crisis caused the failure of 2,293 banks in 1931. . . " in the second paragraph here.
Also, the prime rate was not 21.5% in 1982--although it was that high in December 1980. You remember 1980. Jimmy Carter was president. Remember him? Read all about it here. (Scroll down to the Economy section.)
Where are you getting your so-called "facts?" Wherever you are, Scotty, you're not in history class.
Retail is ferociously competitive here in CA. Malls are always opening and buzzing for a few years. The the next great thing opens up down the street and the now "old" one looks like somebody phoned in a bomb threat. I don't understand how the cycle is profitable. Do they really make all their investment back before the malls lose their customers?
Don't give azurite a hard time....most leverage/ponzi schemes actually DO continue, as long as folks BELIEVE...
...or at least until they run out of suckers.
We just have a sucker-with-money shortage....anyone know how to produce more of those?
The cost of construction for recent strip malls is way too high because of land, labor, and material costs. They could pencil when the economy was booming even though returns were rather paltry by historical standards. However, in an enviroment of a severe recession, failing businesses, and falling rents, the new strip malls are doomed. People who bought older strip malls between 2003 and 2007 are doomed, because they paid too much at crazy cap rates. There will be a trail of devastation in retail space over the next few years.
Scotty-In Star Trek the enterprise has watch like cell phones to get beamed up by your twin.
Don't you have URL links-Kind of similar technology- makes communication easier and faster!
but Scotty's posting speeches by Dead People! They didn't have that on Star Trek.
Gasoline for May delivery rose 2.68 cents, or 1 percent, to settle at a record $2.7835 a gallon in New York. Futures reached $2.7978, an intraday record for gasoline to be blended with ethanol, known as RBOB, which began trading in October 2005.
In the 30s we had Hoovervilles, maybe in the 2010s we'll have Bernankemobiles.
"In the 30s we had Hoovervilles, maybe in the 2010s we'll have Bernankemobiles."
Sure: big guerrilla communities of stationary RVs and camper vans that nobody can afford to fuel anymore. Put 'em up on blocks, steal some batteries, elect a "mayor" and it's the '30s again, only with in-dash 5-CD changer and iPod connection.
There is ample BSC-like optimism across the board on Wall St. Looks like every coming collapse will be a weekend drop to zero. So much for the highly efficient discounting mechanism. How many more NEW, FMT, BSC... wipeouts will it take to finally sink in?
AMD to cut about 10% of workforce by end of Q3
"AMD to cut about 10% of workforce by end of Q3"
BULLISH signs! Should improve productivity numbers!
"AMD to cut about 10% of workforce by end of Q3"
BULLISH signs! Should improve productivity numbers!
Haha... I remember stocks going up 2002-2003 when companies would announce layoffs. Not far from the truth really.
black dog-
Good post. The competition matching your rate is just a form of survival. The weak will get slaughtered and whomever remains standing will get stronger. And yes, 2009 will be brutal as most reserves and hope will ulitmately be burned up by then.
AMD is not making any more stocks! Buy now or be priced out forever.
"At least you seem to have found compensation for your own shortcomings. It's still better to work on and overcome them instead of dwelling in other peoples' (perceived) failings. Although that seems to be a favorite pastime of CR readers.
O-Joe"
Another dope who just doesn't get his own hypocrisy. Idiot! Who are you? Rosengren? Idiot!
From Roubini this morning:In 2001 it was the corporate sector (10% of GDP or real investment) to be in trouble. Today it is the household sector (70% of GDP in private consumption) to be in trouble. The US consumer is shopped out, saving-less, debt burdened (debt being 136% of income) and buffeted by many negative shocks: falling home prices, falling home equity withdrawal, falling stock prices, rising debt servicing ratios, credit crunch in mortgages and increasingly consumer credit, rising oil and gasoline prices, falling employment (now for three months in a row), rising inflation eroding real incomes, sluggish real income growth.
Should be a good time to buy a shopping mall REIT -in about 2 or three years if they haven't converted them to senior living centers.
Anon @ 2:50:
""Rosengren said it's ``confounding'' that housing shows little sign of recovery after the Fed's six interest-rate reductions since September."
Are all Fed presidents as dumb as this guy?"
Check this link:
On Greenspan’s "Fed is Blameless" Canard « naked capitalism
for an example of a Fed dude dumber than "this guy".
It's a prime example in self-justification that descend into a vortex of dumbness rarely rivaled, even by today's standards.
"Should be a good time to buy a shopping mall REIT -in about 2 or three years if they haven't converted them to senior living centers."
Or if they haven't converted them into prisons for mortgage fraud perpetrators (sp?) and SEC violators.
Sure: big guerrilla communities of stationary RVs and camper vans that nobody can afford to fuel anymore. Put 'em up on blocks, steal some batteries, elect a "mayor" and it's the '30s again, only with in-dash 5-CD changer and iPod connection.
Bob Dobbs | Homepage | 04.07.08 - 5:01 pm | #
Kinda like Woodstock only with varicose veins & defibrillators. Wanna see my tattoo - it used to be up here now its down there...
Not just consumers...but companies with credit lines are having problems:
Top Financial News?
pid=20601087&refer=home&sid=aW39_JzF38aw
Never understood why Zell wanted to get into the newspaper business, but even if he renames...what's that Northside field called again?...he may not have enough money to pay his debt.
Re: "posting speeches by Dead People!"
I'm speechless and feel like a vampire...
"Wanna see my tattoo - it used to be up here now its down there..."
I thought that was what all the heloc loan boob jobs were for, to put it back up there.
Not just consumers...but companies with credit lines are having problems...
I'm hearing that too - companies that didn't worry about cash flow 'cause their balance sheet was 'excellent' & they could always 'borrow against their equity in a pinch' are all of a sudden in a pinch and having to change strategy to maximize cash flow.
I'm just a peon... (or is that pion)... and don't get told the whole poop but I can guess whatzup - now they have to run their businesses like... well, like a business.
Shouldn't take a Wharton MBA to know that in the first place...
Out here in Salem and Portland Oregon, there are a lot of signs of the coming retail apocalypse.
In an older local mall anchored by Rite Aid, Firestone, Starbucks, seven stores have closed since Christmas. Across the river at a new, local mall in a high income area... full occupancy... Windermere Realty, two restaurants, a furniture store, a toney kid's hair cutting place, etc.... talked to most all the principals.. all hoping business gets better, or they're looking at closing, perhaps by the end of the year.
Several abandoned CRE developments on Highway 99, ten or so in a 50 mile drive.
But hey, it's 'different here' and other places will get affected by the downturn, certainly not us.
Fifty percent vacancy by 2009? Hmm... seems high, but... think I'd rather dwell on the faults of others.
Later.
WELL,if we don't need a middle class,we CERTAINLY do not need strip malls! Where's the problem?
wner purchased this successful salon 1 year ago and it has continued to grow and prosper. She bought new equipment and upgraded spending over $130k. 5 nail stations, 2 nail techs, 4 spa pedicure stations, 5 hair stylists/5 stations. Long Time Employees! Owner works 6 days, including Sundays with one other employee, the demand is there. Great lease and landlord! No deposit on the lease. She is making money. Very busy strip mall on busy corner! Good books and records!
Employment Boom in Post Housing Bubble & Strip mall FYI:
Long John Silver's (YUM) Store Owners Say Their Weekly Specials Don't Help Business
Long John Silver's, America's fried seafood restaurant chain, was surveyed by Tickermine this month. 24 stores were consulted about their specials for that week, whether these have generated more business, what was the most popular menu item, is the store near a mall and which restaurant was their closest competitor.
Lunch was the more popular mealtime apparently with 17 respondents, or 71%, and dinner was cited 7 times, or 29%. Lobster Bites were the new special for this week for 13 stores or 54% followed by the Family Chest Treasure Pack and the Value Basket Combos each with 3 respondents, or 12%. Crab cakes were cited by one party, or 4%, and 4 representatives, or 16%, reported having no special items this week.
I'm calling a bottom on this thread
Last!
Was that really the bottom? Interesting about Zell dryfly...
do you have any historical context or graph to put these numbers against so we can see where we are relative to a recession, or relative to the beginnings of a recession, or maybe where we were in 1991 which is much more interesting than a 1996 level.
best
argh! Cowtown Cali beat me to the joke.
Are all Fed presidents as dumb as this guy?
Probably not so much dumb as disingenuous.
Determining which is worse is left as an exercise for the reader...