LAS VEGAS-You can tell that Joseph Cosenza, the vice chair of The Inland Real Estate Group, is bullish on retail. And in this exclusive interview from RECon 2014, he explains exactly how much. Inland today is a sprawling operation, in terms of both geography and service. In addition to his views on the retail market in general, Cosenza provides a wide-ranging company-performance update.

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Q: How's business?

A: This year I was kind of worried. Three or four days ago, I asked how many appointments we had at RECon and I was told a little over 600. Well, last year, we had 702, and I was concerned. But this morning I checked and we have 732, so I am happy.

Q: Inland really covers the waterfront. What are you seeing in each of your areas of focus?

A: This is the first time we've been in 49 states. Inland American purchased the Aston Waikiki Beach Hotel in Hawaii. Other than that we have about 75 million square feet of commercial properties around the country. It's a mixture of shopping centers and other retail spaces. Then we have a small amount of office and we have industrial and student housing. And we have 20,000 hotel rooms and we have apartments.

Q: On the retail front, we're hearing a lot about the new age of tenants. What are you seeing?

A: I don't know about the phrase new age. But something extremely interesting is that just last year, 2013, all of my entities did over 1,250 leases.  Of those, the majority were renewals of existing tenants, and the rental rates were higher by about 5%. For new tenants coming in, the rent was higher by as low as 10% and as high as 20%. That's something I haven't seen since 2008.

Q: Are you seeing a different type of tenant?

A: It runs the gamut. I'll give you an example. In Chicago we had a grocer—Dominick's--that had about 40% of the market until Safeway bought them and eventually got them down to zero. They shut down the entire doggone 72 stores. Now that's bad. That's bad for the 3,000 or 4,000 people who worked there, bad for the landlords and bad for the tenants. But they'll have to deal with that when they get to the pearly gates.

Now, 72 stores shut down five months ago. Today, 60% have been re-leased, from Mariano's to Fresh Foods to Caputo's. And there's something else. I get excited when I see that even though the economy is slowly getting a little bit better, retail is getting better faster.

I'll give you more examples. No one does backfilling better than we do. Do you own a Kindle? Well, I want to thank everyone who does for shutting down my Borders. We had four shopping centers that had Borders. In one of them Borders went out and Ross came in. In another Home Depot went out and it was backfilled with Ross. In another that also had a Border's, it got backfilled with Whole Foods. And another got filled by Fresh Market.

So there's a velocity that allows us to fill up those store fronts, and the hardest spaces to backfill are stores like Borders, where you have multiple stories and an incredible amount of Tis that were put in.

Q: Although retail is growing fast, you could make the argument that it's easier to grow exponentially from a small base.

A: I agree with that as long as we're talking about existing centers.

Q: Where are you now? Are you a net buyer or seller?

A: If you asked that a year ago I would have said net buyer. We were called a black hole. Once we bought it, they wanted in that entity and stayed there forever. Last year, the Inland American REIT board of directors decided it needed to restructure itself before it decided if it should go to the New York Stock Exchange. So they chose to take the product type that could get the highest price and the lowest cap rate in the marketplace. So they sold $2.3 billion worth of net lease deals, which was fabulous. All at once we became sellers, but for a specific reason. It wasn't because the assets weren't good or because we were taking out all the stuff we didn't like. It was a strategic move to make the REIT smaller and possibly better able to go to the stock exchange.

Q: What's the outlook for retail expansion?

A: Let's start with new construction. My answer is no, no, no, no. I say this because from 2001 to 2008, 140 million square feet was built around America. From 2008 to recently, there's been only 40 million square feet. We need to fill that up.  Now, there are instances where you might need to fill a niche in Brooklyn or a niche in Downtown Chicago.  But to build another shopping center in the suburbs? Come on. Are you nuts?

Q: On the leasing side, what are you seeing?

A: As I explained, in the last year, we've done 1,250 leases. That's a heck of a lot of leases. And we're seeing so many of them re-rent their space. They went through this horrible recession, and they not only survived, they've increased their rent. So on a general basis, I have a better outlook than I had a year or couple of years ago.