About 37,000 retailers, retail brokers, investors and other retail professionals gathered in Las Vegas this week for RECon, the industry's largest trade convention, amid a tangible sense of frustration -- not so much about the retail real estate business, which remains uniformly good, but rather over the gloomy headlines and negative narrative regarding store closures and retailer bankruptcies that have dominated recent headlines. 

Attendees adopted a defensive stance with a hint of defiance about what many described to CoStar as overblown sense of negativity by news outlets and industry analysts in reporting and dissecting the woes of retailers such as Sears, JCPenney, Macy's and a series of apparel chains and others that have announced closures. 

Throughout the sessions, brokers, landlords and retailers ridiculed headlines pronouncing a "retail Armageddon" and the death of brick-and-mortar stores. 

Brokers, owners and retailers packed the Leasing Mall at RECon 2017 in Las Vegas this week.One analyst said that with so much differing sentiment in the marketplace, this year's confab felt like "a quest for the down-to-earth truth about the state of physical retail."

"Contrary to so much media coverage, the world is not coming to an end by any means, for either physical retail or online retail. Just the opposite," said Ben Conwell, senior managing director with Cushman & Wakefield. "Disruptive, yes, but great opportunities remain. We're very, very bullish on the successful integration of the retail world with supply chain network." 

By the third day, however, the narrative at the annual celebration of global consumerism had shifted to hammering out deals and sharing leasing and sales strategies in the changing enviornment. Conference goers worked their phones and packed the Las Vegas Convention Center floor scouting out potential deals. 

Panel discussions focused on repurposing malls and shopping centers with the latest food, beverage and entertainment concepts, redeveloping aging Class B properties and rooting out the "hidden money traps" in onerous leases. 

"Everyone wants to figure out what the next hot food and entertainment concept is going to be -- what's the next Topgolf, what they can do to get a piece of the action before the market becomes too saturated," said Cushman & Wakefield Vice President Garrick Brown. "The next decade is going to be all about mixed-use and redevelopment, creating an urban feel in a suburban location." 

Hessam Nadji, president and CEO of Marcus & Millichap, said the recurring question he is asked by clients is, "How do we turn the current dynamics and negative headlines into opportunity?" 

Westfield and other major mall players have largely weeded out B and C properties and are focused on building 'fortress' investments in their best assets and locations, Nadji said during the investment brokerage's annual Retail Trends conference at the Renaissance Hotel. 

The world's largest mall owner, Simon Property Group, (NYSE: SPG), this week announced plans to invest another $1 billion in redeveloping its properties. Over the past five years, Simon said it has invested more than $5 billion to upgrade and expand its properties, adding restaurant and entertainment space and redeveloping former department store sites to keep up with the changing preferences of its customers. 
Nadji said shopping center owners and investors need to think about how best to reposition their properties based on specific consumer needs in their trade areas, adding health care, restaurants and tenants such as home improvement stores linked to the recovering single-family housing market. 

"It's about recycling the real estate. It's not about the retail," Nadji said. 

Alexander Goldfarb, REIT analyst with Sandler O'Neill + Partners, said this year's RECon felt like "a quest for the down-to-earth truth about the state of physical retail." 

"While the management teams seemed more honest about the extent of the pressures on the industry, the message was the same as in recent earnings calls -- demand for quality spaces endures, but now requires some extra sweat to achieve," Goldfarb said. 

Despite concerns over the prospect of additional department stores closures and liquidations, leasing spreads for recaptured space appear to be remaining intact. And while larger retailers may be throttling back expansion plans, new concepts and small-shop tenants seem to be expanding, Goldfarb said. 

Richard W. Chichester, president and CEO of Faris Lee Investments, spends a lot of his time listening to and advising retail landlords about the opportunities and challenges of repositioning underperforming shopping centers. 

"The repurposing of retail is something people have talked about for years, but most have not seen it yet," Chichester said. "At no time in our careers have fundamentals been more important. The most important thing is the quality of the real estate -- not the tenants. If it's strong real estate and there's a good business plan, it's defensible." 

Retail is the most complex and sophisticated of the major commercial property types, with a smaller pool of more highly skilled players in the market today, he added. 

"Retail is always fluid, moving to the expectations of the consumer. Amazon is now one of the largest landlords in the country, through a huge brick and mortar e-commerce presence," Chichester said. "With its warehouse type stores, Wal-Mart was one of the earliest examples of omni-channeling. When you take a tube of toothpaste off the shelf, their system already knows and is already sending the order to replenish their inventory." 

"Wal-Mart and Amazon are going to meet in the middle in a huge collision," Chichester said in closing.