It’s hardly fair to say that the retail industry is back but there are indicators that momentum has swung in the right direction. Attendance at this week’s ICSC RECon 2012 conference increased approximately 15% from 2011 and nearly 35% from 2009. In addition, the total number of exhibitors increased as well. It was also very obvious that we continue to grow towards a true global economy with attendees and firms from all over the world represented.
ICSC RECon continues to be one of the most important and well-organized events of the year for commercial real estate professionals. It is hard to imagine a more focused population of decision makers all located in one setting. It seems that many retailers and service providers alike are “cautiously optimistic” for continued growth in the retail sector.
Many times the success of providers of pre-development services such as phase 1 environmental site assessments (ESA), property condition reports (PCR), ALTA surveys, hazardous materials management, appraisals, etc. are key indicators of an emerging or progressing market. Partner has been busier this last quarter providing due diligence, but the physical due diligence industry overall is also getting busier, which is a good sign for the CRE market.
With growth comes opportunity, as well as risk. Our primary goal as physical due diligence professionals is risk management – to help minimize our clients’ environmental and engineering risks associated with owning or leasing a retail property. That being said, one element of a good due diligence firm is being able to identify opportunities, not just risks, with a property. One way we do this is by offering an energy audit component to the property condition report (a “green property condition report“). The green property condition report goes beyond a normal property condition assessment to identify the building’s current energy performance and opportunities to invest in energy and cost savings measures. More and more of our clients are looking to add this scope to their standard due diligence because it can identify these risks and opportunities early in the process and even serve as a negotiating tool for the transaction.
The upcoming summer season looks to include moderate new store development, acquisitions and consolidation. Provided the winds blow in the right direction, we share in the cautious optimism of the many industry leaders at ICSC.