Real Estate New Jersey - December 2008

this market but it has to be the top of their choices. Every single big box has called us up and said stop working on what you’re working on, we’re reevaluating things. They’ll go and reevaluate. Then their top choices they’ll keep going forward with. They’ve all cut back substantially with respect to the number of stores.

We have one big box client which has done this for the last year-and-a-half or almost two years. They were calling us every couple of months reevaluating the same markets and the same store locations like three or four times. Now we’ve gotten the go ahead on several locations.

BOUGHTON: So they’re being very opportunistic?

SEMERARO: Yes, very.

WINTERS: Not only opportunistic, I think one of the things that’s changed is everybody’s feelings toward certain retailers like the “big bad” Wal-Mart. All of a sudden with the economy the way it is people are starting to look for economical shopping and Wal-Mart offers great prices. Shoppers want them now. So, if shoppers want them they’re convincing their political leaders to let them in.

BOUGHTON: Yes, value price retailing is key right now. It really is.

BRUNELLI: Do you think we’re going to see a refreshed economy sooner rather than later?

AMBROSI: I think it’ll be sooner. Some people are predicting two years. I don’t see it lasting two years. People are too impatient with cash and there’s too much cash on the sidelines.

GUTMAN: It will happen. There are cycles and it’s going to go in cycles. But the exact projection is a tough one

I’ll leave to others. I do think though just as we’re going to see shakeouts in retailers, we’re going to see shakeouts among developers. It’s going to be more important, just as retailers are going back to basics, that developers will need to go back to basics as well.

What’s going to be critical for developers now are the things that we used to look at in the old days - competency, knowledge, cash and the ability to deliver on a deal… So I expect some fallout on the developer and landlord side.

BRUNELLI: In light of what’s happening in our economy are we going to see a greater emphasis in our future in New Jersey on mixed-use projects, urban projects, lifestyle centers, power centers and outlet centers? Those are five categories of retail that are certainly being developed throughout the state. And is any particular group, set or one type going to become easier to develop, more in demand by retailers?

GUTMAN: A good location is going to be a good location regardless of the type of location. So put that number one. Number two, just as developers are going back to basics, retailers are going back to basics as well in terms of looking at trading areas, understanding population, site characteristics, ingress, egress –- really the fundamentals are going to be much more important now than they have been.

If there’s one of those types of centers though that I do believe is going to grow in importance, I think it’s going to be the urban type of developments. There are still huge populations in urban communities in New Jersey and around the country for that matter that are not well served by modern retailing. And I think that that’s going to be an opportunity that developers increasingly look at and I think it’s an opportunity that retailers, although some have been slower than others, will see as growth areas.

AMBROSI: The categories that will be successful I think are driven by two factors: one, emotion and, two, economics. Everybody is going back to basics. But what also drives anything is emotion. People want to live in urban areas; they want to be close to other people. So that’s one factor for the urban developments or the mixed-use being more successful. We see that trend continuing more and more.

Secondly there’s economics. people will be more sensitive to economics in the future.

I think we’ll start to see a turnaround within a year. I don’t think it’s going to be two years. I think in one year everybody’s going to start to feel better, the money’s going to be released, lending will come back and you’re going to see the beginning of a good economy.

However, I think people will not forget what we’re going through. Therefore the basic fundamentals will absolutely prevail. I think the power centers, the discount stores will be successful. I don’t see life-style being successful for a very long time. Outlet centers are tough to put together, and they’re very limited.

BRUNELLI: Are New Jersey’s urban areas attractive to national retailers? And are redevelopment projects worth waiting for? Does mixed use in urban areas work for retailers?

BOUGHTON: Children’s Place will go into an urban area. I mean that’s some of our core customers right there. And we’re very opportunistic where we do that because we have to be close to transportation. We have to have ingress and egress in a building and, escalators are difficult, for our customer who we speak of as a “mom and a stroller.” So we will absolutely look at urban.