Wells Fargo expert: Tougher sell ahead

With gas prices nudging toward $4 per gallon, properties in remote locations could be more difficult to market through the remainder of this year. So says John Silvia, chief economist for Wells Fargo.

Silvia was the keynote speaker Feb. 25 at the International Council of Shopping Centers' 2011 West Florida Idea Exchange at the Grand Hyatt Tampa Bay. He spoke to the same group three years earlier, when his bank was called Wachovia.

Getting retail investors to look outside larger metropolitan areas may be more difficult the higher fuel prices get, says Silvia, who keeps tabs on Florida's economy from his office in Charlotte, N.C. That's especially true for places like Pasco County, where a huge amount of retail space has been developed in recent years.

“It's going to be a tough year for some areas,” he told the ICSC audience.

While most people think of higher gas prices more in terms of what it costs to fill their tanks than unrest in the Middle East, Silvia says those costs have more of a ripple effect on Florida. More money spent on gas means less discretionary spending, he says, and higher costs for airline tickets means fewer families flying down to beaches and theme parks.

“We're going to have to deal with a lot of strange countries doing strange things,” he says. “This is no longer a safe world.”

Silvia paid a compliment to the 500-plus audience attending this year's ICSC Idea Exchange for outlasting the real estate bust and urged paying greater attention to economic indicators, which some of their colleagues didn't do in 2008.

“They went on the assumption that they could sell whatever they built,” he said. “You are the survivors.”