SAN DIEGO—While retail developers are busierthan they were a few years ago, they're still doing moreredevelopment and repositioningof existing shopping centers than ground-upconstruction, said panelists at ICSCWestern Division Conference's general session yesterday.The panel was titled, “Development is Revving Up,” but speakerssaid there's still too much available retail space on the market towarrant new ground-up development.

Moderator Kevin MacKenzie, senior managingdirector of HFF LP, said that on the spectrum ofretail centers, outlet centers are the furthest along in thedevelopment cycle, while power centers are seeing the least amountof development nationally. Rick Kuhle, chairmanand CEO of Vestar, noted that an increase inpension fund money going to real estate—a new allotment from 6% to10% among pension funds around the world—which will drive cap ratesdown. But, he added, pension funds “will be the most aggressivebuyers out there.”

When asked which markets the panelists were focusing on in theWest Coast and why, Kuhle said his firm targets markets where theycan be the dominant center in that area in their subspecialty. Headded, “Our geographic diversity is that of our partners—those arethe areas in which they want to participate.” BradGeier, managing partner of Merlone GeierPatners, said his firm targets “markets that are supplyconstrained with barriers of entry and infill locations withinthose markets.”