You know all about the the sweeping Republican gains in Congress and statehouses. That in itself will affect the industry.
To just name one example, the threat of a rise in the taxation rate for carried interest will be a virtual impossibility. Republicans staunchly opposed that proposal. It only ever was able to gain traction in the House when it’s been brought up in the past. It has never been able to move forward in the Senate. It seems unlikely that the lame duck session will take up this issue at all.
On the flip side, a combination of a Democratic President, Republican House and an essentially split Senate spells gridlock. Will Congress get anything done in the next two years at all? Some might argue that the best Congress is an ineffective one since not passing any major legislation means they won’t be able to mess things up worse than they already are. But if the economy continues to flounder, I don’t think voters will be too pleased two years down the line if this next Congress has no accomplishments to lean on.
Beyond that, a common theme in the business world leading up to the election was that the uncertainty about what might be coming out of Washington in terms of taxation and regulation was holding back investment and job creation. An improving employment picture, of course, is essential for a robust commercial real estate recovery to occur. The implication of that certainly seemed to be that a Republican victory would be better for business, since that would make tax increases or increased regulation less likely. So now we’ll just have to see if the victory does translate into businesses loosening the purse strings and beginning to hire and invest. Let’s just hope that this wasn’t merely a talking point.
In addition to the big changes, there was one ballot measure in Maryland that you may not have heard about that sets an interesting precedent for retail real estate. In Anne Arundel County, voters approved a ballot item that will enable Cordish Co. to add slot machines to Arundel Mills Mall.
A bitter fight was waged for months between supporters and opponents of that measure. The passage means that Cordish will be able to add a $430 million casino to Arundel Mills. This was a quirky situation, but it does lead me to wonder if this works out well for Cordish and the state (with the boost in tax revenues) whether this is something other mall owners might explore for some properties.
Update 11:55 AM: The National Retail Federation has put together a very useful write-up of how the election will affect issues important to retailers. Definitely worth a read.
Retailers Blame Warm Weather for October’s Spotty Sales
by David Bodamer November 4th, 2010
October’s same-store sales numbers are in and the results are a bit of a mixed bag. About an equal number of retailers posted gains and declines. Overall, same-store sales for the 30+ retailers that still bother to report monthly figures were up about 1.5 percent give or take a few basis points depending on whose numbers you want to use.
Retailers blamed the results on the fact that October was much warmer than normal, suppressing sales, for example, for things like sweaters, outerwear and other cold-weather items. Many are hoping that November–which is projected to be colder than normal–will unleash pent-up demand for these sorts of items.
Another factor to keep in mind is that same-store comparisons are now against tougher year-over-year comps. The period from September 2008 through August 2009 was marked by low retail sales (although some retailers did benefit from the fact that competitors were put out of business, bolstering their own sales). Therefore the comps that began in September 2009 were against that weak backdrop. The figures that started last month were in comparison with a stronger 12 months than the ones before, especially as the pace of store closures and retailer liquidations slowed considerably. The retail market has been stable for a while now. So there’s no more survivor bias to the figures. Now it’s just straight comps over the last 12 months without as much noise as a result of the shakeout that began in late 2008.
Going forward, most analysts are projecting a fairly strong Christmas. ICSC, for its part, is saying the November-December selling period will feature same-store gains of between 3.0 and 3.5 percent, making it the strongest year-over-year season since 2006.
At any rate, additional write-ups of the same-store figures are at the New York Times, CNN and the Wall Street Journal.
My look inside the monthly reports is after the jump. Read the rest of this entry »
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