Retail: Better Off Than Last Year
Next week's ICSC New York National Conference will bring together thousands of retail real estate professionals from the area and beyond. And according to Joseph French, an associate vice president of investments at Marcus & Millichap (booth #413) who specializes in retail, there should be more activity this year than in 2012 at the show. For his part, he says he has more appointments this year than last year and they are about specific deals, not just about conceptual transactions.
We chatted with him yesterday, and here was his take on why the mood might be more upbeat:
"The mood is much more positive than last year for several reasons. Last year there was activity again, but the activity was driven by the institutions and their flight to core assets, and the availability of funds was very tight for non-core and tertiary assets. Even if someone had a desire to sell them, it was difficult for anybody to buy them.
Institutions are pulling back to core assets and disposing of non-core assets. We’ve had a number of deals with the institutional owners’ non-core assets. The CMBS market is coming back, and we’re also seeing portfolio lenders lending on non-recourse. For a while they were only lending on core assets, they had to be perfect assets, and they weren’t lending much in tertiary markets.
The projections are that retail sales are going to be up 3%. That's not as great as last year, and we still have some issues in the economy, but everything is very positive. One of the things that this year offers that is very unique is that it has one of the longest sales periods, 32 days, which is highly unusual. Because it falls on a Tuesday, you get those additional days."
What is your take? Do French and other retail real estate professionals have a reason to be upbeat right now?