Retail real estate may not have had the bounce back from the recession enjoyed by multifamily, but ICSC’s RECon, the largest show of the year dealing with this commercial real estate sector, is proving that it’s starting to improve.
Retailers are once again expanding and looking to do more deals than years before, Brad Umansky, president of Progressive Real Estate Partners, told CoStar. Some of them with increasing sales are even having trouble finding the right sites to place their stores, showing it could be more of a landlord’s market than we have seen for a while.
Suburban markets are even getting more attention from retailers in this environment, said Mary Jane Olhasso, assistant executive officer with San Bernardino County, says Mary Jane Olhasso, assistant executive officer with San Bernardino County, in California’s Inland Empire.
JLL concurs that retail real estate transactions are up, according to a GlobeSt.com article. The firm says that transactions were up 10.5 percent in the first quarter from the same period last year. For the whole year, JLL predicts that retail sales will rise 15 percent above 2014’s volume.
Right now the most desirable products to buy are malls and grocery anchored centers. REITs are especially active, picking up about one third of the retail assets that traded during the quarter.
Meanwhile, large owners are getting more involved in purchasing urban retail, which was once mostly dominated by private buyers. The rush by retailers following residents to these areas is fueling this trend.
Commercial Property Executive reports that more than 35,000 RECon attendees have hit this year’s show.
One official from DDR said that it’s a good time to be a seller (the shopping-center owner has sold about 500 properties since the recession), but finding good deals that have affordable cap rates can be a challenge in this rebounding commercial real estate sector.