New decade brings bumps in the retail road.

Two years ago, e-commerce was perceived by many analysts as a major threat to the growth prospects, and even the stability, of shopping centers -- a notion that reflected the naive enthusiasm of the dotcom bubble. Nevertheless, retailing as a whole has experienced some uncomfortable bumps early in the new decade as a result of the recession.

Surprisingly to some, the retail segment least affected by the economic downturn is the grocery-anchored community shopping center. While many argue that the nation in general is probably "overmalled" to some extent, the inventory of smaller shopping centers providing basic services has remained well aligned with the growth of the communities they serve.

Investors have responded to this fact. As a national business publication noted in a headline recently: "Strip Malls Centered on Supermarkets Pull in the Investors."

The experience of my firm, a REIT traded on the New York Stock Exchange, bears that out. A few months ago, we came to market with a large secondary offering of common stock and raised about $48 million, which we're puffing to work primarily to expand and upgrade our 2.6-million-SF portfolio of community centers in the New York tri-state area and New England. The stock sale was unusual in that secondary offerings by REITs overall have been few and far between in recent years.

Why are investors looking kindly on community shopping centers? The answer is simple: Performance. Occupancy levels are high, earnings are strong, and REIT dividends, which are returning to favor because of low interest rates, are substantial. As an example, Urstadt Biddle's portfolio-wide occupancy rate was 98% as of the end of the first quarter. And while financial statements for that quarter are not completed yet, operating revenues for the period ending Dec. 31 were up 13.6% over the comparable period the previous year, and earnings more than doubled, excluding a onetime gain. All that in a year of recession.

Typically, community centers are anchored by a large grocery establishment, which fosters a comforting level of stability, since the need to feed one's family is little influenced by trends in fashion or, for that matter, in the economy.

And the supermarket, of course, brings customers into contact with other non-luxury retailers -- such as the dry cleaners, pizzeria, pharmacy, etc. -- which experience relatively inelastic demand for their products and services and don't have to fear competition from regional malls.

Here in the Northeast, shopping centers, including the community centers, received a modest boost from the nearly snowless winter. Snow removal expenses were minimal and there were no sustained interruptions in traffic as a result of storms.

We experienced slightly stronger results in our properties closer to New York City, in Fairfield, Westchester and Nassau Counties, for example, than in those deeper into New England. The reason is that the areas closer to the city are experiencing somewhat stronger population growth. But the differences were minimal, with all properties performing well.

The only negative to report is the trend toward higher property taxes. E-commerce has proved to be an illusionary nemesis, but taxes, as the proverb says, are a sure thing.