IRVINE, CA—Buyers/investors are attracted to the West Coast because they are getting more bang for their buck, Sperry Van Ness' council chair of retail investments Shari Tucker tells GlobeSt.com. We spoke exclusively with Tucker during ICSC's Western Division Conference here last week about what makes West Coast retail so special. Check out our additional coverage of the conference as well on the San Diego page.

GlobeSt.com: How would you describe the state of the West Coast retail investment market?

Tucker: CoStar and RCA's mid-year review shows the total 2015 retail transaction volume for the period ending in July was $31.3 billion, with the West Coast total deal-flow volume at $8.6 billion. Los Angeles saw most of that with more than $1.3 billion in sales and an average cap-rate of 5.4% and $261 per square foot. The Northeast market saw $8.6 billion in total retail investment sales volume, and Manhattan saw most of that volume with more than $4.7 billion in retail-investment sales activity and cap rates as low as 4.1% and price per square foot on $565.

Statistics aside, my experience and knowledge indicates that single-tenant and grocery-anchored centers in major metropolitan markets on the West Coast are driving most of the sales volume as individual investors strive to seek stable long-term investments in single-credit purchases (Walgreens, Starbucks and urgent-care facilities, to name a few). Single-credit tenant investments are considered relatively low risk since they are generally newer buildings, housed by tenants of publically traded companies and often have long-term leases. REITs are driving the cap-rates down and sales up by chasing grocery-anchored shopping centers. These investments will include not only the long-term lease of a single-tenant grocer, but also the numerous and various credit tenants that often lease in grocery-anchored centers and pay higher rent to do so.

GlobeSt.com: What strategies are key to getting top dollar when selling a retail investment property?

Tucker: Getting top dollar for your asset has everything to do with hiring a knowledgeable broker that specializes in the particular product type you wish to sell and putting the full board press on marketing. With 70% of the individual investors being first-time buyers, and many of them not afraid to seek purchases outside of their home state, it is even more important to utilize all available marketing forums and to market the asset directly to investors and brokers alike. At Sperry Van Ness, we take a great deal pride in our collaborative cooperation initiative. Simply put, this means that at Sperry Van Ness, we share of commissions 50/50 with outside brokers all the time, which incentivizes non-Sperry Van Ness brokers to show their investors our sales listings. The market is just too segmented for one broker to know all the investors. By marketing it directly to investors and brokers alike, you'll reach a greater segment of the investor pool and in turn increase exposure of the asset, which will more often than not produce more offers and will almost always generate a higher purchase price. Marketing the property to any one broker's known buyers misses a large portion of qualified buyers. I'm not talking about placing a sign on the property—I'm talking about reaching out to all brokers, investors and bankers through a simple but multi-layered approach to marketing.

GlobeSt.com: Why are investors attracted to retail investment properties on the West Coast?

Tucker: Buyers/investors are attracted to the West Coast because they are getting more bang for their buck. Going back to the statistics I stated earlier, cap rates between the two sides of the country show a 150-basis-point difference, and with no barriers to where one can purchase, it only makes sense East Coast and Midwest investors are combing the West Coast for better returns.

GlobeSt.com: Why is now a good time to buy or sell a retail property on the West Coast?

Tucker: Buying or selling West Coast retail properties all boils down to the same reason: demand and low interest rates. Sellers of West Coast retail properties are attracting buyers looking for attractive cash-on-cash returns. Throw in the instability of the stock market into the mix and it's a great time to buy. Where else can you get an 8% to 10% return in today's markets?

Selling? Much of the purchasing over the past eight years has been sellers who purchased through a distressed loan, portfolio or auction sale for pennies on the dollar. With the fundamentals of leasing returning, investors are seeing increased returns on their initial investment. These investments were never meant to be long-term investments; the exit plan was to always clean them up, increase cash flow through leasing, remove the restrictive loans and turn around and sell them.

GlobeSt.com: How will the 2016 retail investment market on the West Coast be different than 2016?

Tucker: It's too early to really tell since 2015 still has an entire quarter left on the books. What I can tell you is there seem to be two trains of thought on how 2016 might look different from 2015. Some believe as long as interest rates remain relatively low, we will continue to see increased deal flow as leasing continues to stabilize through lease-up and increase rental rates. Then there are those who feel that starting in 2016, we could very well begin to see a number of assets and loans hit the market once again as the properties' existing 2006/2007 loans will need to be refinanced and may not be able to meet the stricter LTV and lender underwriting. Owners will be asked to increase their equity by depositing additional cash into the deal. Those who have it will do so; those who don't will once again have to deal with special servicers. With that said, investors should really be looking at their investments now and anticipate and prepare for the refinancing. Maybe it makes sense to sell now or work with your property manager on getting rents up (many owners lowered rents to keep good tenants—it's cheaper to keep them than rent to new ones). Don't wait until your loan is due—have a good broker do an analysis on your property. That way, when the lender calls, you're prepared. I can't stress that enough—some folks just waited too long before they got serious, and I saw too many good people lose their property.