Weekly Market Insight 12.14.09

Retail Sales

Year Over Year % Change, Seasonally Adjusted

Retail sales are headed in the right direction with total and core sales (excluding vehicles and gasoline) posting their first year-over-year gains since the fall of 2008. It’s one more piece of evidence that the economy is firming up, but it comes with a caveat; the year-ago comparisons from which the gains are calculated were very low because that was when the credit crisis really got rolling, and consumers were deeply concerned about their financial well-being. Since then, the stock market has bounced part of the way back, home prices have found at least a temporary bottom and job losses are abating. Moreover, there is likely some pent-up demand that has accumulated since consumers snapped their billfolds shut in late 2008. Consequently, retailers may do a bit better this holiday season, particularly since their inventories are lower and they may not need to discount as steeply. While good news for shopping center landlords, this does not mean that recovery is imminent. Expect leasing market conditions to soften through most of 2010 as retailers downsize further and the construction pipeline continues to empty out. Courtesy of Robert Bach, SVP, Chief Economist, Grubb & Ellis.

For a free consultation of your commercial real estate needs please contact Sean Thompson at 406.539.0082 or sean.thompson@grubb-ellis.com OR Joe Cobb at 406.579.2999 or joe.cobb@grubb-ellis.com.  www.MTcommercialRE.com