12
Street Journal 12/28/2000 " leading retailers said that their same store sales for the holiday
season were flat or up only slightly. Wal-Mart, Sears, Target and Federated all said sales at
stores open at least a year are falling below their forecasts for December.
Shopping malls have been adapting to counter the threat of e-commerce. Some examples are
malls becoming entertainment centers.
Some of the biggest retailers i.e. Simon Properties have formed subsidiaries
(clixnmorter.com) to develop new internet ventures with retailers. They also plan to wire 176
of their malls for internet access.
More retail space has been entering the market while spending has been declining. The
Warner Brothers Store on 5
th
and 57
th
Street will be closing in January. Sterns will close its
8 Story department store in Herald Square in the spring. Montgomery Ward announced
bankruptcy and that is would be closing its doors. Expect more of this especially in the
marginal areas.
There will also be a continuing trend in shopping conversion to schools, office and high tech
applications. The advantages is that the location, infrastructure and basic structure is there.
However, we still have a warning flag out for retail given the nature of the ever expanding malls
given the fixed demographics
OFFICE
Overall the office market had an outstanding year. According to the Cushman & Wakefield
report the Long Market had the following general statistics.
Office Vacancy
Quarter
1998
1999
1
st
Q
10.7%
9.1%
2
nd
Q
10.8%
8.9%
3
rd
Q
10.0%
7.1%
4rh Q
9.5%
7.7%
As of the third quarter of 2000 overall vacancy
Class "A"
5.9%
Weighted Average Rent : $28.88
Class "B"
8.9%
Weighted Average Rent: $25.49
As of December 2000, according to the Cushman and Wakefield report, the overall vacancy
rated increased to 8.6% up from a record low of 7.1% at the end of 1999. According to their
third quarter report a record low vacancy of 5.2% was reported in Nassau and Suffolk
