We attended the International Council of Shopping Centers (ICSC) convention here in New York at the Hilton this week. The ICSC hosts the primary retail real estate conventions in the country, principally in New York City in December and Las Vegas in May.
Why or how does this affect the franchising community? A short walk through the convention floor makes it impossible not to make the connection. A notice board alerts everyone to the IFA’s (International Franchise Association) presentation that afternoon on how “Franchises Offer New Uses for Retail Space.” By the way, the IFA is planning to release its own prognostication of the immediate economic future on December 16. You may want to visit the IFA website at that time to see what that admittedly optimistic organization sees in your future.
On a tour of the booths we immediately encounter GE Capital franchisee finance, then Arby ‘s franchise opportunities, Dunkin’ Brands, Yum Brands, Rita’s, Red Robin, Subway and on and on. All franchisors looking for sites for their franchisees. You cannot host a retail real estate gathering without talking about franchised opportunities. Retail real estate growth depends on business growth and business is seeing the opportunities presented by the franchise model and the durability offered by that model. As a result, those of us working in franchising are grateful for our real estate experience and looking to make it work to our franchise clients’ benefit.
The mood at the convention was one of somewhat forced conviviality. Speakers at the conference were describing a somewhat optimistic tone in terms of consumer spending. However, the real estate market’s rebound may take longer than the consumer’s. On the selling side, it is not a strong market and many feel the real estate downturn has not yet found its bottom. One of the largest presenters, General Growth Properties, is just emerging from bankruptcy. While no one at the convention was conceding the heretical view that it has become a buyer’s market, there is still a real sense that vacancies abound and deals can be had. There is even a growing market for discount brokers and developers picking up and marketing excess space.
A franchisor, franchisee or multi-unit developer who is looking for affordable locations might have found the convention’s rather extravagant entry price ($650) worth it. The convention presents a wealth of information concerning available locations for the industries that have traditionally been at the heart of franchising, retail and restaurants. They meet again in Las Vegas in May and there are numerous other smaller meetings. Check out the ICSC website referred to above.