China’s retail development and investment opportunities are progressively spreading to large second- and third-tier cities – all with populations above 1 million – which puts added importance on building the right contacts and partnerships in China’s real estate market, advises Rong Ren, chief executive officer of Harvest Capital Partners and a ULI member . Read about how retail has changed in China as a whole, as well as which markets the growth is spreading to and what might be required to invest if you are not from China.

Despite the current volatility and concerns about financing, real estate will continue to be a good investment in the long term, says Richard A. Kessler, chief operating officer of Benenson Capital Partners LLC. Kessler, also chairman of ULI New York, offers readers advice about property type, tenants, geography and the proper approach for investing, developing and managing.

At a time when new development is not an option for most retail developers, repositioning existing properties in ways that increase their value can be a viable alternative. Read about successful strategies from a panel of industry experts at ULI’s 2010 Fall Meeting session, entitled, “Renewed Retail Opportunities.”

In the current recession, thousands of stores have been shuttered, new projects have been shelved, rents have been pared, property values have cratered, and retail workers have been sent packing in legions: more than a half million lost their jobs alone in 2008. But as the dust begins to settle and the rolling metal curtains are peeled back for a new sales day, retail is reemerging as a different animal, one that is leaner and keener.

The retail real estate market currently suffers from an oversupply of space—the result of overbuilding before the financial crisis struck in 2008—plus a dearth of retailers now willing and able to fill space. Consumer spending is down for the foreseeable future as the buying public remains wary of returning to the days of large credit-card debt. While welllocated retail destinations may continue to thrive and maintain national retailers, plenty of others are going to keep losing tenants. In this environment, town centers and mixed-use centers may have an edge over their mall counterparts.

Though vacancy rates at shopping centers in the United States are not expected to peak until 2011 at around 12.2 percent, the going consensus is that for the most part, the worst of the retail crisis has passed. Too much supply has been part of the problem. Between 1999 and 2008, 25 million to 30 million square feet (2.3 million to 2.8 million sq m) of new shopping center space was added to the market annually, says Ryan Severino, an economist with Reis. This year, the volume of new center completions will likely be around 2.5 million square feet (232,000 sq m), according to CBRE Econometric Advisors. Absorption is expected to turn positive in the fourth quarter, but rents will likely continue to decline through 2012, dropping 2.9 percent this year and 0.4 percent in 2011.

For much of the past decade, buoyed by a vibrant real estate market, readily available credit, and acquisitive consumers, international retail investors and developers enjoyed healthy growth, in both developed and developing economies. Now, in the aftermath of the global market downturn, developers—faced with an oversupply of retail square footage (especially at the high end), failing projects, and a cautious buying public—have been forced to reconsider their geographic strategies and retail models.

The retail industry has lagged behind the sustainability curve for some time, but is now quickly catching up as developers, landlords, and tenants seek to “green” their retail facilities to realize operational gains, demonstrate environmental stewardship, and capture increasingly conscientious consumers. However, because little information is available on the best leasing structure to benefit both landlords and tenants, many opportunities in retail real estate and store planning remain on the shelf.

Later this year, the U.S. Green Building Council will launch Leadership in Energy and Environmental Design (LEED) ratings for retail facilities to help illuminate best practices in the retail real estate market. Contrary to common belief, greening the retail building market involves much more than buildout; for example, it encompasses site selection, structuring of a green lease, tenant-space buildout, operations and maintenance, and communication strategies.

Given the demographic and behavioral shifts, as well as the supply competition, expected to continue after the economic recovery, what steps should small cities take to boost their downtowns?

With U.S. cities increasingly strapped for cash, it comes as no surprise that community benefit districts (CBDs) are gaining in popularity. But will CBDs redefine America’s cities of the future? A growing number of property owners think so.