Total occupancy costs are expected to remain stable in 61% of real-estate markets in the U.S. and Canada, according to a study by DTZ. Those numbers might be the lone bright spot for landlords wrestling with rising vacancy rates and declining rents.
To avoid slashing prices, retailers are working with suppliers to lower costs initially. Williams-Sonoma is introducing more merchandise below $100, and J. Crew is looking to keep more pants and knits below $80.
Although Saks won't resort to broad discounting again, the company will offer shoppers select luxury brands' lower prices. Brands such as Prada and Christian Dior have reduced some of their entry-level prices.
The one great challenge for REITs today is maintaining liquidity at a time when the CMBS and unsecured debt markets have disappeared, Fitch Ratings says in a report. The ratings agency said revolving credit facilities have gained considerable importance for REITs recently, and the trend is likely to continue.