At first glance, anyone visiting Pittsburgh might wonder what happened to the recession.

After all, there's a casino under construction on the North Shore, a new skyscraper being finished off Downtown, which is across the street from an old five-and-dime store being converted into apartments, retail and fitness space.

And the Downtown office market has stayed strong, thanks to moves into the city core or expansions by UPMC, Equitable Resources, Siemens Power Generation and others.

Despite the activity, the recession finally seems to be catching up to the Steel City. Local real estate experts say new development has slowed considerably lately because of tight credit markets and cutbacks or bankruptcies by national retailers.

"I would say that depending on the size of the development, it's become fairly difficult to start any new project of any critical mass due to the number of retailers taking a wait-and-see approach," said Herky Pollock, executive vice president of CB Richard Ellis/Pittsburgh.

The general rule of thumb is projects that had financing and a start before last fall, when the economy tanked, are still in decent shape. But it's a different story for those that didn't.

"Anything that's in process has stayed the course. Anything that's new, meaning that we haven't had a ground breaking or anything coming up from the ground, that's clearly being evaluated now with a different set of eyes," said Jason Stewart, vice president of the Grubb & Ellis Co.

Among the projects that have stalled is a $48 million condo and hotel complex proposed for the SouthSide Works complex. To date, developer DOC-Economou has been unable to secure financing to move ahead.

In addition, Target has pushed back the debut of its proposed East Liberty store from fall 2010 to the summer of 2011, as it scales back openings this year because of the economy, which has been particularly hard on retailers.

Developer Ralph Falbo has decided to build apartments rather than condos on the South Side near the UPMC Sports Performance Complex as part of a $14 million development.

Mr. Falbo, developer of the 151 First Side condo tower Downtown, said he made the change because it was just too difficult to secure financing for condominiums right now.

"From the standpoint of financing an entire development as condominiums, that has become strained over the last six months," he said.

Mr. Pollock said some retailers are reluctant to negotiate on projects that have yet to break ground for fear that they may never come to fruition.

"My fear is that for the next six to 18 months retailers will be much more cautious when it comes to new developments and more optimistic when it comes to existing developments or vacant spaces," he said.

Peter Sukernek, vice president and general manager of Howard Hanna Commercial Real Estate Services, said the developments that are finding it most difficult to secure financing are those priced at more than $5 million. Small or medium-sized projects, on the other hand, still should be able to acquire credit, he said.

"I think new development is a little more of a challenge because of the times we are in," he said. "Someone who has something on the drawing board today has a few more challenges in front of him."

Not all the news is bad.

Mr. Pollock said he has had "significant interest" in both the mixed-use Bakery Square development in Larimer and the Settlers Ridge project in Robinson, which will be anchored by a Giant Eagle Market District grocery.

He has been able to secure 75,000 square feet of new leases at Settlers Ridge over the last three months. He also expects to have several new announcements involving Bakery Square within the next month.

"We have had very good activity in the last 60 days despite all that's going on around us," he said.

The $130 million Bakery Square project is on schedule and on budget, said Todd Reidbord, president of developer Walnut Capital. The first office tenants should move into the old Nabisco plant this fall, followed by retailers early next year. A Marriott SpringHill Suites hotel now under construction also should open by early 2010.

As for the impact of the economy, "I think the biggest change we've had is that it's taken some of the tenants a little longer to make their decisions," he said.

Mr. Reidbord believes the Bakery Square project has thrived in part because of its location near many of the East End universities and medical centers, which so far have weathered the economic storm better than many other segments of the market.

One new development that has sprouted amid the economic gloom is the Newbury project in South Fayette.

Developer EQA Landmark Communities managed to secure financing last fall just before the economy crashed, President Brett Malky said.

"We're very, very fortunate. Had we not been financed and approved, we would be having a wholly different conversation," he said.

The Newbury development, near the intersection of Interstate 79 and Route 50, will feature 225 single-family homes, about 170 garden apartments and 1.2 million square feet of commercial space.

Mr. Malky expects to have lots available to home builders by winter and anticipates the first residents will move in by spring or summer of 2010. The same timetable applies for the apartments.

Commercial development will come last, with an expected completion in 2011. The developer has received "substantial interest" from big box retailers, restaurants and others, Mr. Malky said.

It already has letters of intent with a number of tenants and is in final negotiations with "three major anchors," he added. It also has settled on a hotel developer, although Mr. Malky would not name it or any of the others EQA is talking to about leases.

With the economy is such tough shape, there are lots of potential tenants looking for deals but there are none to be had, Mr. Malky said.

"It doesn't matter what the economy is, our price hasn't changed. It's a brownfield. We need to move a lot of dirt. The cost didn't change because of the economy," he said.

Although development has slowed, David Glickman, vice president of the retail group for Grubb & Ellis, said Downtown, Cranberry, Oakland, Robinson, the McKnight Road corridor and Monroeville are among the areas holding their own.

"There are still retailers looking in those areas, doing deals," he said. "There are plenty of bright spots. A lot of retailers are expecting things to turn around mid to late this year."

Pittsburgh as a whole is doing better than lots of other places, he said, adding that a number of retailers continue to expand here. They include Mattress Discounters, Panera Bread, Giant Eagle, Aldi grocery, Walgreens, Dunkin Donuts, Costco, Rue 21 and Best Buy.

As local unemployment increases, Robert Bach, Grubb & Ellis senior vice president and chief economist, expects Pittsburgh office vacancy rates to rise this year, although not as much as they will nationally.