ICSC Observations

By Jonathan Hipp

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Upcoming Events

• ICSC ReCon 2012

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• Engineering Returns Through Energy Efficiency
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There was definitely a more positive atmosphere at this year’s Mid-Atlantic ICSC and West Florida ICSC. Some attendees estimated a 30% increase in attendance. The DC area continues to be one of the most attractive in the nation and many consider it almost a world apart from tertiary markets.  Here are some other quick observations from the conference floor.

Mid-Atlantic ICSC:

• NNN pricing has returned to pre-recession, peak levels
• Given the falling cap rates and increased buyer demand, shopping center owners are more willing to consider the sub-division and sale of outparcels and pad sites 
• Developers are anxious to move projects forward, putting shovels in the ground
• Many entrepreneurial buyers continue to seek "value-add" opportunities, especially with the economy showing signs of improvement
• Concerns remain about inflation and a sustained period of low interest rates
• Significant uncertainty still exists, and the election year politics has some taking the "wait and see" strategy

West Florida ICSC:

• Overall, upbeat event.  There is still a lack of supply in the market for net leased assets and new development remains quite slow.
• Retailers are looking at new locations and regional/national tenants have been reviewing new markets, especially in the gas station sector.
• consumer spending is still recovering, but with the stock market improving, it's only a matter of time before investors demand more top line growth in sales, which can best be achieved by adding new locations.
• Retailer's have shifted their focus from real estate a bit, with real estate expansion decisions more heavily decided by operations instead of the real estate department.
• While the recession is over, there is very little new ground up development in the pipeline.  The vast majority of new development remains focused on redevelopment versus truly new ground up projects.

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