They are expected to be out in force at next week's International Council of Shopping Centers convention in Las Vegas where attendance is expected to be down 40% because of the gloomy economic outlook.
'I think it's probably the worst mood we've had and I've been doing this for 30 years. The gloom and doom has taken a toll on the transaction business in both leasing and capital markets,' said Gerry Mason, managing director of Savills LLC, a division of Savills Plc, the world's third-largest real estate services company.
He said that tenant sales are down, vacancies are up and rental growth has slowed or in some cases has turned to declines. 'The prognosis short term is very poor and I don't think we're going any place upward in a hurry,' Mason added.
Of the 1,300 malls in the country, 200 to 300 are in danger of going out of business or becoming something else, he predicted.
Last month, General Growth Properties Inc, the second-largest US mall operator filed for bankruptcy protection after it was unable to refinance its maturing loans.
A lot of commercial real estate buyers who thought they would be able to replace maturing interest-only loans with new debt are expected to fall into the same trap. And the bigger the loan, the less likely a borrower will be able to replace it.
Those taking part in the convention have reduced their spending. Some big exhibitors, such as Simon Property Group and Westfield Group aim to save a couple of million dollars by holding meetings in hotel suites and rooms instead of expensive stands.
Tenants will have the pick of malls and the upper hand negotiating new rents with prices that haven't been so good for 10 years according to Greg Masin, a Cushman & Wakefield senior director and a top retail leasing broker.
