CHICAGO, LAS VEGAS—As investors gather at this week's International Council of Shopping Centers conference in Las Vegas, Chicago-based JLL says a tightened supply pipeline is pushing many to venture into riskier territory and expand their definition of what constitutes “core.”

Buyers have certainly become more active. Retail transaction volumes in the first quarter of 2015 notched up 10.5% from the same period last year, to $22.2 billion, according to JLL retail research. And JLL predicts that in 2015 retail investment trades will rise 15% over 2014 levels.

“Retail transactions have summited to new heights following the extreme lows post-recession,” says Kris Cooper, an Atlanta-based managing director at JLL. “In 2015, we're optimistic for a strong but steady year with a 15% uptick in trades. We're seeing investors buy at higher premiums and venture into different markets in the pursuit of yield. Retail investors' acquisition strategies are being driven by limited supply and high demand. It's that simple.”

Investors still consider malls and grocery-anchored assets the most-desirable retail products, he adds. REITs have driven up mall sales significantly by trading their non-core shopping centers to private funds. At the same time they have been purchasing stakes in trophy assets. In the first quarter of 2015, REITs accounted for more than one third of total traded retail product, according to JLL research. Meanwhile, private investors continue to buy up grocery-anchored shopping centers, which accounted for nearly 70% of their purchases in the first quarter.

In addition, high-street/urban retail has also captured the attention of retail REITs and foreign investors, at least in major US markets, particularly in New York, Los Angeles, San Francisco and Miami, according to JLL. Storefronts may cost a lot, but “this product type also offers longer lease terms, allowing landlords a better refinancing window, a guaranteed rent-roll, and plenty of foot traffic.”

“The majority of the world's retail has operated as a streetscape and now the US investment community is jumping on the bandwagon,” says Michael Hirschfield, executive vice president for JLL. “Urban retail was once dominated by local ownership, but now we're seeing a consolidation of ownership as the largest retail property owners are claiming their stake. A flight to the urban core by millennials and boomers is making urban retail portfolios the new suburban trophy mall. As long as the buyer understands that rental assumptions are aligned with market conditions, urban retail acquisitions are proving to be a sound strategy.”