[Porsche-O-Phile]

There was a heck of a lot of speculation in the commercial/retail market as well, driven indirectly by the speculation in residential (both due to "copycat" mentality and due to lots of retailers making "easy money" off of house flippers and other individuals with lots of "paper profits" being flush with cash). A lot of these retailers were luxury or pseudo-luxury types with mediocre business plans, largely just opportunists hawking goods with obscenely high markup rates, because during the good times, "rich" buyers were relatively easy to come by and were relatively indiscriminate in their shopping.

So basically I observed two things: (1) conventional retailers built like mad, creating a massive overcapacity in the retail sector and (2) "new" or unconventional/luxury retailers snapped up available "B" and "C" tier retail space, or created demand on shopping center developers to build new centers or expand...

The multiplier effect of this is bad - lots of new stores = lots of new jobs, which is a good thing for a while. But now that those stores are having to face the reality that they never should have been built in the first place and were the result of either lousy RE deals, lousy catchment area analysis or both they're realizing they can't keep their doors open. Obviously this means vacant stores (bad for SC developers and communities) and naturally job losses.

Retail as a sector is going to be D-E-A-D for a long time to come. In the words of an architect I worked for many years ago (who specialized in retail work & speculative shopping center developments): "...it's always the first to go and the last to come back..." This won't be any different. I sort of qualitatively think that retailers that have good business practices and models and sell a variety of products (not just overpriced "upscale" crap) will probably hang on if they can make it through this year. Generally speaking. But we're going to lose a TON of the high-mark-up "luxury" and "pseudo-luxury" retailers and it'll take a while for this to all shake out.

There are going to be LOTS of shopping center vacancies for a good long time. Get your business plans ready for when the turnaround starts in a year or two - it'll be a good time to consider opening a small shop then I think...