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The New Black Friday

The New Black Friday
Ready for Round 2? Garrick Brown, research guru for ChainLinks Retail Advisors' network of independent brokerages, says bullish Black Friday numbers portend a strong holiday retail season.
The New Black Friday
Garrick tells us the run-up to this year’s holiday season looks much like last year’s, which ended up being pretty good—anemic sales growth projections, then Black Friday blew everyone away (7% increase for Black Friday alone, 16% for the entire weekend).Consumer confidence has taken one of its biggest jumps in years. “The American consumer is looking to splurge again on Christmas.” Garrick forecast 3.5% to 4% growth before Black Friday and thought that was bullish; now he’ll go back and rejigger things a bit. With stores like Toys "R" Us opening on Turkey Day, he says Black Friday this year became Black Midnight and not-so-dark Thursday. Given intense competition, both the Internet retailers and bricks-and-mortar guys will keep moving up that date.
The New Black Friday
For retail landlords, however, it’s a mixed bag. Much of the sales are discount-driven, and retailers have put the brakes on expansion. It’s primarily chains in the mid-price or mid-size range—especially a combo of the two—that are struggling. Garrick doesn’t foresee the current demand for retail space increasing, even with a great holiday season. The good news is mall owners won’t be killed by bankruptcies as much in 2012. In the first half of this year, almost all the growth in occupancy was wiped out by just Borders and Blockbuster. The Borders bankruptcy—about 300 stores at 30k SF each—accounted for 9M SF. “That’s nine regional malls worth of space going dark with just one player.” Even in the weakest markets, the top-tier centers are seeing low vacancy and rent growth.
The New Black Friday
Lucky Joes: Terranomics’ San Jose office is located above the Yard House at Santana Row. Garrick expects the retail market in San Francisco to tighten with rapidly escalating rents in almost every district. But just across the bay, demand other than in top-tier centers is dropping off because retailers want to be in high-density urban locations. The vacancy rate for San Francisco shopping centers is 4.1%, likely dropping below 3% by mid-year or September. Along Market Street, retailers are starting to show interest in revitalizing portions of the Tenderloin. Garrick will be spending the holidays hoping the Green Bay Packers “don’t blow it.” (In a region of ’Niner fans, he’s a cheesehead.)