ICSC To Bring Golden Opportunities?
SAN DIEGO-ICSC’s Western Division Conference kicks off this Wednesday the 18th in San Diego and GlobeSt.com will be in attendance, but we caught up with 12 industry heavy hitters before the event to hear their expectations and what they hope to accomplish.
GlobeSt.com: What are your expectations for the ICSC Western States event? What are you hoping to accomplish at the meetings you will be having there?
Bill Passo, founder of Passco Cos.: ICSC has always been an important event for our company, through which we gain a strong sense of what is happening in the retail industry, and make new, important connections. We look forward to continuing that positive momentum at this year’s event, and we have a large team from Passco who will be attending. With regard to our hopes for the event, naturally we’re hoping to lease all of our vacant space, and have every broker bring us two-three golden opportunities. Isn’t everyone?
Dennis Vaccaro, Senior Managing Director, Faris Lee Investments: ICSC conferences have consistently seen slight increases in attendance over the past couple of years and I would expect that to continue for this show. Overall I see the “mood” out there to be cautiously optimistic. On the good side, we are seeing positive momentum in the overall economy, but as to be expected that means that interest rates are increasing. The risk for commercial real estate is that the other asset classes may become more attractive to investors while at the same time our debt costs continue to increase. Many investors (including a large percentage new to commercial real estate) have considered CRE a safe harbor for investment over the past several years. That attitude pushed billions into CRE and worked to drive down cap rates. The current economic conditions may see investors become more willing to take on greater risks by again investing in other asset classes in order to diversify their portfolios while seeking higher returns.
Kelly Reenders, economic development agency administrator, County of San Bernardino: The conference should be very positive and busy—especially based on the amount of development and interest we’re seeing in our region. Existing owners are reinvesting adding to their retail centers and a number of strong brands such as Target and Wal-Mart continue to expand.
For the County, having a presence at ICSC is important. We look to the conference as a significant opportunity to maintain and grow relationships with the people who make the greatest impact on retail in San Bernardino County—everyone from brokers to developers to retailers. We look forward to showing them why now is the time to invest in the County, so we expect a lot of strong deal making—for all segments of the market.
Matthew Mousavi, managing director, Faris Lee Investments: I expect ICSC San Diego to be a productive conference for us. We anticipate attendance to be better than in prior years, and deal-making activity to be strong. The current market is in a state of change and transition. As interest rates rise, coupled with the mixed messages we're receiving from various metrics on the health and stability of the US economy, we are prepared to advise our clients accordingly, and employ strategies going forward in order to achieve the goals and objectives of our clients.
Bernie Labowitz, SVP of Sperry Van Ness / Renaissance Commercial: I suspect that the attendance will be up, the mood will be more positive than past years and attendees will be in a deal-making mood. Retailers are now showing a sense of urgency with their decision making and have a plan for their business. This is due to stability with the economy and a new normal with consumer spending.
Tom Swieca, SVP in Voit Real Estate Services’ Inland Empire office: Overall, retail is picking up speed on all fronts, and the upcoming ICSC Western Division Conference in San Diego will likely reflect this new direction. At Voit, we’ve seen a growing momentum over the last two years at ICSC in both San Diego and Las Vegas, and we anticipate that this year’s event will be a continuation of that forward movement.
Dave Mossman, EVP and chief investment officer in the Costa Mesa, CA office of Donahue Schriber: ICSC’s annual May RECON is always a good barometer of what to expect in terms of attendance, mood, and deal making activity at the Western Division Conference in San Diego. The RECON Show in Las Vegas hit a post-recession high this past May, so I’m expecting strong attendance and an upbeat mood on the convention floor in San Diego.
Chris Hite, president of Coreland Cos.: I expect there to be a heightened focus on new development. Across Southern California we are definitely seeing a surge of housing starts, the necessary predecessor to new retail. We have been experiencing an uptick in leasing activity and an increase in the stability of our management portfolio. Thus, I am hoping to hear from confident retailers with aggressive growth plans that support the need for new development.
Craig Killman, SVP and west coast retail market lead for Jones Lang LaSalle: We expect the mood at ICSC San Diego to be upbeat, but remain cautiously optimist. We have multiple meetings with national retailers and institutional investors as well as local and regional tenants and investors.
On the West Coast, restaurants and movie theatres are active and doing very well and traditional retailers that have completely embraced e-commerce as an extension of their overall retailing distribution channel are thriving as well. Customer experience in today’s retail world has taken over where customer service has left off. Investors and Occupiers alike are scrambling to retain their existing customers and attract new ones. The successful ones are creating a differentiated, enchanting environment for their customers to patronize. People need a reason to leave the comfort of their own homes to shop. Amazon, eBay, Shopzilla, Zappos and the retailer’s own online sites are making it too easy to shop from home. Humans by nature are social beings and want to get out and interact with other people; those interactions need to be “amazing” or the consumers will find an interaction that is.
Dave Cheatham, president of Velocity Retail Group LLC: I think this will be the most active San Diego ICSC since the times of the pre-2008 recession. People are much more upbeat and positive and are in the mood to start making deals. While things are not as robust as pre-2008, I am seeing that we are back to activity levels of around 1999 or 2000.
Neil Soskin VP of Real Estate at Primestor: We anticipate the San Diego conference to be well attended, increasing from last year. Our schedules are filing up, and we are expecting 60-70 tenant meetings. The vibe we are hearing continues to be cautiously optimistic. The trend of national tenants and their strong demand for institutional quality sites continues unabated. For our azalea regional shopping center opening in South Gate in 2014, the demand is greater than we can satisfy. We expect to open 100% leased, or perhaps a single small vacancy.
Shaun Riley, senior managing director, Faris Lee Investments: We expect the positive momentum we had at the 2013 RECON in May to continue at the San Diego ICSC. The convention should be well-attended with a higher level of deal-making activity than we’ve seen in the past few years. Since RECON, the 10-year Treasury Rate has increased from 2.03% to 2.94%, so we expect the conversations with investors to be centered around pricing expectations in light of the current financing environment.
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