What about the Vacancies

Posted by Carol Coletta on December 30, 2008

With thousands of stores expected to close next year, the big question for cities will be what to do with the vacancies.  Because most cities depend on sales tax, most have overzoned for retail locations.  Think about the impact of a long-term vacancy of one or two houses on a single block.  Now think about the impact that retail vacancies will have on the psyche of those who live nearby or travel by them daily.  A change in use (especially in a declining real estate market) is a difficult and slow process.

The Chicago Sun-Times reports today that four retail analysts -- Britt Beemer, Howard Davidowitz, Larry Freed and Michael Niemira -- believe retail names will be wiped off the map and thousands of stores will close in the new year.

"Davidowitz estimates retailers will shutter 12,000 money-losing stores in 2009; Beemer predicted that half of today's retailers will be in big trouble -- perhaps at risk of shutting down -- next year; Freed believes 20 to 40 retail chains will go out of business in the first three months of the new year, and Niemira predicts 73,000 retail locations will close in the first half of 2009.

Niemira is chief economist for the International Council of Shopping Centers, which predicts, using U.S. Bureau of Labor Statistics data, that 148,000 stores will shut down in 2008. That would be the largest number since 151,000 closings in 2001, during the last recession"