Think things are pretty bad?  Unemployment is through the roof, right?  Here on the northshore, not so much.  Retail sales are at rock-bottom!  Um… no, not really.  It’s gonna be a hard candy Christmas?  Well… not really.

                  “We’re going to have a Christmas.  People are tired of gloom and doom,” said Ann Freibert, Specialty Leasing Manager at Northshore Square Mall in Slidell, one of two properties owned by Morguard Revenue Properties. 

                  “We’re doing a lot better than most,” said Grady Brame, Executive Vice President of Stirling Properties, which owns or manages dozens of retail shopping centers, including Hammond Square, Mandeville’s Premier Center, and the Stirling Covington Center (informally the “Target Center”) on Hwy. 21.  “It’s not easy out there, but most of our properties are holding their own.” 

                  Indeed, anything more than a cursory glance at local and regional data will show that although the economy may, in fact, be tanking in California or Kentucky, hereabouts things are pretty hot – or at least tepid – compared with other locales.

                  A short-term analysis, which is what most talking heads offer, will show that retail sales fell nearly 10 percent from 2007 to 2008, a drop of half a billion dollars in retail revenue in St. Tammany Parish alone.  But short-term analysis is, by nature, short-sighted.  Look back a little farther, and you’ll see that retail sales is still up about 33 percent from 2004 – the year before Hurricane Katrina threw us into a false economy of unprecedented sales and, for the astute, a foreseeable drop-off as things normalized.  So even with that 10-percent fall-off from ‘07 to ’08, sales volume is up about one-third from pre-Katrina days.

Feel better?

                  “Some sales have gone down, but they were so high before that they’re still healthy,” said Brame.  “Sales were off the charts a few years ago. But as tough as this market is, we don’t have a vacancy (in the Premier Center). We’ve been able to retain most of the original tenants from when we opened it 10 years ago.”

                  “Look at how St. Tammany Parish has performed compared to the rest of Louisiana and the nation,” said John Geddis, General Manager for Retail Operations for Morguard Revenue Properties, which owns North Shore Square in Slidell.  “We’ve been very fortunate.  We haven’t lost any major tenants.”

                  That says a lot, particularly in an environment where bankruptcies such as Linens ‘n’ Things and Circuit City dominated the news only a year ago.

                  “We haven’t been adversely affected nearly as badly as the rest of the country,” Brame said. “I don’t see things skyrocketing, but we’re going to see positive trends in 2010 and 2011. Things will start getting a little better each month instead of a little bit worse each month.” 

                  Indeed, there’s already a more positive attitude among retailers and retail center management.  “A lot of times we’ll see a shift in the economy faster with our local tenants,” Freibert said. “I’ve been pleasantly surprised.  Both of our properties (in Slidell and Houma) have experienced an upturn, even in terms of tenants moving in.”

                  So while things may not be skyrocketing, as Brame said, they aren’t nearly as gloomy as last year.  “In the fourth quarter of 2008, there was so much uncertainty,” Brame said.  “But now people realize that although times are tough, the world is not coming to an end.”

                  “Flat is the new ‘up,’” Freibert said, “and we’re not flat. We’ve had sales increases and we’re bringing in stronger tenants. It’s a very good market.”  Freibert said North Shore Square is at 90 percent occupancy.  “That’s good!” she said.  “In this market, a lot of shopping centers are at 75 or 80 percent.” 

                  It is, in part, a testament to the tenant mix.  And having stronger tenants means two things:  “trendy” and “discount.”  Specialty stores on the higher end of the marketplace are the ones suffering the most, while retailers like Aeropostale and Rue21, which appeal to a younger demographic with trendy products and less costly items, are booming.  So are big-name, big-box stores like Target.  “We have the opportunity to bring forth things that aren’t here, and that does not have to be ‘big box,’” Freibert said.

                  “The luxury retailers have suffered,” Geddis said. “As we get trendy retailers who are value-added, it’s more appealing. But we need a mix and we have a mix.  We’re not too trendy.” 

                  “It’s a thoughtful process, to meet the needs of existing customers while attracting new ones,” Freibert said.  And from every crisis arises at least one opportunity, right? 

                  “Our opportunity here is to improve the tenant mix and work with tenants we have to improve products,” said Geddis, who also mentioned plans to expand North Shore Square in the near future.  “We hear people say, ‘I have to go to New Orleans to get what I want.’”

                  Ironically, though, those who study shopping trends say that while consumers may perceive that bigger is better, their habits don’t match their words.  “People like to have 100 choices, but they stick to the same two or three,” Freibert said. “And we have those two or three.”

                  Quite so.  And it’s also true of the Stirling ventures, both in terms of tenant mix and tenant retention in its 11 million square feet of retail space scattered throughout Louisiana and Mississippi.  “We’ve not taken undue risk,” Brame said. “And we’ve ridden the right horse the last few years with Target.”

                  All this optimism doesn’t mean there won’t be vacancies in retail strip centers this year.  On the contrary, a lot of retail space projects that launched pre-recession are complete, but virtually empty. When Stirling undertook the Covington Center and the renovation (or resurrection) of Hammond Square, there was a different climate.

                  “Times were good,” Brame said. “There was credit availability and demand for retail. The landscape has changed, and this market has adversely affected the high-end, luxury side of retail.”

                  Times were also good when Morguard purchased North Shore Square in 2006 and spent considerable time and money on a facelift and rebranding for the center.  And even as the credit crisis loomed, smart negotiations kept things looking good.

                  “We’ve got a better look, better property, better tenants,” Geddis said.  “A lot of national retailers stopped doing deals.  They stopped talking to developers.  We were able to work with them to get some deals that other malls may not have gotten.” 

                  “We were able to get projects off the ground when others weren’t as successful,” Brame said. “If Hammond Square had relied solely on the higher-end market, we’d have the same problems (as other areas).”

                  At Stirling, Brame said there has been no adjustment in how they handle tenants and properties, since they’ve always been responsive to tenant needs, customer safety, and keeping the outer appearances fresh.

                  “We’ve seen the good, the bad and the ugly,” Brame said.  “Difficult times create opportunities.  There will still be opportunities, just different than in the last 10 years. We’ve done huge projects with lots of new development, but for the next couple of years you won’t see a lot of new development.  That’s giving us the opportunity to work with existing properties to make sure they stay attractive.”

                  And for the Retail Season that starts on Black Friday, the day after Thanksgiving?  “I think the retail season here will be OK,” Brame said. “I think it will be better than last year.”  Geddis is just as optimistic.  “It may not be a banner year, but we’re going to be better than pre-Katrina.”