There's already nearly 50 square feet of retail space for every man, woman and child in the U.S., and current retail vacancy rates are approaching 13 percent. Some existing malls currently sit abandoned and are being auctioned off.
Of course, the recession isn't equally felt in every city in the country. Perhaps there's a market ripe for more shops... but it's doubtful.
Here's a look at some of the developers starting new shopping-center projects. They're either just plain crazy or extremely patient when it comes to getting a return on their investment. Our money's on the former, but some of these developers are very big players in the mall world. Maybe they know something we don't about the speed at which retailing will bounce back.
- Toronto-based mall pro North American Development Group plans to begin construction this fall on a 94,000-square-foot strip mall near Dallas that's to be anchored by a grocery from Safeway (SWY) subsidiary Tom Thumb. The company is already underway on a 400,000-square-foot open-air center near Fort Worth to be anchored by JCPenney (JCP) and Belk (BLKIB), part of the million square feet or so of new retail the Dallas-Forth Worth area will see open this year. North American might want to take a look at recent sales figures for those department stores -- they might be the kind of anchor that makes you sink to the bottom of the ocean, instead of the kind that provides a major shopping draw.
- Also in Texas, local developer Griffin Partners began work in February on 24,000 square feet of retail in its Nassau Bay Town Square mixed-use development, with plans to be ready for retailers in May. That's about one-third of the total retail space planned for the project.
- In Florida, The Village at Gulfstream Park opened in February, weighing in at nearly 500,000 square feet. This one's near a racetrack, and the theory is to feed off the track's visitors. Developer is $12 billion dollar powerhouse Forest City Enterprises (FCE) in Cleveland. Forest City lost $31 million last year but still has cash on hand to develop new malls. Also coming from Forest City is South Bay Center, a new 100,000-square-foot complex across from South Bay Galleria in Redondo Beach. The Galleria's got a million square feet, but apparently that's not enough to serve local southern California shoppers. Forest City's won over Nordstrom (JWN) on the idea -- they're putting a Nordstrom Rack in the new center.