Daily Real Estate News  |  September 13, 2007  |   Shopping Centers Hit by Credit Woes, Store Closings
Shopping centers are being caught in the credit squeeze. Investors, brokers and analysts say deals are taking longer to complete and prices – particularly for second- and third-tier properties – are declining as much as 10 percent.

''We are seeing prices change. We are seeing deals blow up. People are calling us back a second time to see if we want to consider another offer,'' says Fritz McPhail, the owner of Blue Ridge Capital, a real estate company that specializes in acquiring troubled strip malls.

In metropolitan areas with strong population growth, like Phoenix and Orange County, Calif., new shopping centers are easily attracting tenants, according to a report by the researcher CoStar Group. But new centers in several other metropolitan areas – Memphis, Cleveland, Indianapolis, Tucson, Southwest Florida and Nashville – are having trouble leasing space, CoStar said.

One reason is that retail chains are closing stores faster than they did in 2005 and 2006. During the first half of this year, Merrill Lynch counted 6,126 closings, an 11 percent increase over the period a year earlier.

Source: The New York Times, Terry Pristin (09/12/2007)