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ReCon unites developers, businesspeople
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Gary Thompson/LAS VEGAS REVIEW-JOURNAL
Workers on Thursday hang a sign for an Ultimate Electronics store at the Centennial Gateway Center at U.S. Highway 95 and Ann Road. An official from Territory Inc. said the new store's arrival signals improvement in the local retail market. » Buy this photo
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LAS VEGAS REVIEW-JOURNAL
Despite a weak retail market and lackluster consumer spending, the ReCon 2010 show presented by the International Council of Shopping Centers is expected to draw 30,000 retail developers, business owners and leasing agents to the Las Vegas Convention Center today through Tuesday.
It will be a busy three days for Terri Sturm, president of Las Vegas-based retail developer Territory Inc., who said she has appointments scheduled every half-hour at the ICSC leasing mall.
"I really expect it to be productive this year," said Sturm, developer of several big-box shopping centers in Las Vegas. "I expect the mood to be better this year. The overall economy and retail sales are much better. Local and national retailers are out there looking at growth."
Sturm said she found an anchor tenant for Centennial Gateway at last year's show, the first Ultimate Electronics store to open in Las Vegas in a long time. The Thornton, Colo.-based retailer is taking 35,000 square feet at the center at U.S. Highway 95 and Ann Road.
Job losses and reduced spending by tourists and residents continue to plague Southern Nevada retail, economist John Restrepo of Restrepo Consulting Group said. He finds it "startling" that the anchored retail vacancy rate has spiked by nearly 300 percent since the first quarter of 2007, when it was 2.7 percent.
Sturm said the retail market is improving. In addition to Ultimate Electronics, she recently signed three leases at Centennial Gateway and has two letters of intent going to lease agreements.
"Everything we see is moving in a positive direction," she said. "We saw rents hit the bottom in 2009 in our centers and start to pick back up. We went through a period with very little deals. I can tell you the amount of concessions has dwindled to almost nothing. Sales reports we get from our tenants have been trending up since last summer."
Retail sales improved for the third straight month in March and are at their highest point since September 2008, the Commerce Department reported. Sales of motor vehicles showed the strongest increase at 6.7 percent, followed by building materials (3.1 percent) and apparel (2.3 percent).
At its peak, retail leasing reached 1.2 million square feet in Las Vegas, Restrepo reported. Demand continues to drop, with the last four quarters seeing net absorption -- or amount of space taken -- of negative 268,000 square feet. That's an improvement from negative 645,000 square feet in the prior four-quarter period, Restrepo noted.
Las Vegas architect Paul Steelman will unveil one of the largest projects he's ever designed at ReCon 2010, the $6.2 billion KT Entertainment City in South Vietnam. A 12-foot project model, which cost $50,000 to $60,000 to construct, will be on display at the show.
The entertainment complex, about 16 miles from Ho Chi Minh City, will feature a theme park designed by Steelman Partners; seven hotels; convention center; shopping mall and movie studio; water park; cultural village; wedding complex; and outdoor street retail.
"I really feel that to get interest in 350,000 square feet of shopping would take two years of marketing if we didn't come to the show," Steelman said. "They truly believe this is America's meeting place and they're impressed with the hundreds of decision-makers that come to the show."
Sturm, who has attended ICSC for about 25 years, said it's the largest convention in the retail industry.
"Not only owners of shopping centers, but you bring all the retailers out here, from Lowe's to Smith's and everybody in between," she said.
Retail vacancy was at 19.4 percent nationally in the first quarter, up from 19.2 percent in the fourth quarter and 320 basis points above the same quarter a year ago, the Urban Land Institute's May real estate report shows. Rents remained stable in the first quarter and are off 7 percent from the same quarter year ago.
Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.
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