This might count as good news: U.S. consumer spending and personal income both rose in May. Spending jumped by a small but noticeable 0.3 percent when compared with April, and personal income spiked upward by 1.4 percent, the strongest jump in more than a year, according to the U.S. Department of Commerce. The question now for retailers and their landlords is how much of that is going to go toward buying things.

So far, a lot of U.S. income previously devoted to keeping retailers happy is instead keeping banks happy by going into savings. The Commerce Department also reported that personal saving as a percentage of disposable income increased to 6.9 percent in May, the highest in more than 15 years.

Still, if it continues, such rises in income might have some kind of impact on retailing—even on car sales. J.D. Power & Associates said on Friday that new-vehicle retail sales thus far in June have risen "notably" from May. The company expects retail auto sales for June to be about 789,000 units, down 9 percent from June 2008, but up 14 percent from May. Incentives from dealers are probably helping to move the merchandise, but it could also be that the suspense over what would happen to GM—now over, with the auto giant in Chapter 11—was holding back sales as well.

Retailers may be seeing some glimmers of light ahead, but as a whole investors are still reluctant to buy retail properties. According to a report late last week by Real Capital Analytics, sales of U.S. retail properties totalled $418 million in May, down 12 percent from April. "With levels so low, the decline in dollar terms would have been considered just a rounding error in prior years," the report noted.

But that doesn't mean that there aren't retail properties buyers out there, mostly under the radar, with some of them turning to markets that investors in major metro areas rarely consider. New York-based Stonemar Properties, for instance, has made a number of recent investment forays into such lesser-appreciated markets. Among other recent acquisitions, the company has bought two shopping centers in Jonesboro, Ark., with a combined area of 155,000 sq. ft. for $16 million; a 300,000-sq.-ft. shopping center in Owensboro, Ky., for $19 million; a 350,000-sq.-ft. power center in Cookeville, Tenn.; and a shopping center in West Des Moines, Iowa.

"Even otherwise savvy investors who are still in the market for retail properties are hung up on geography," says Emmet Austin, managing partner and chief investment officer of Stonemar. "If they've never heard of a market, they're not going to bother with it. But the current state of the economy means you have to dig down deeper, and that's what we're doing."

Another attitude keeping away investors—mistakenly, Austin believes—is that every retail market is suffering from the same kind of malaise affecting some of the very large markets, such as those in California, Nevada, or Florida. "Those places are getting killed, the thinking goes," Austin says. "So how can smaller markets be doing any better? The truth is, there are a number of secondary and tertiary markets that are supporting retail properties quite well, even in the current climate."
—Nielsen Business Media