Retail Investment Activity Ticks Up in 1H18

Retail investment activity is ticking up, slowly. In the first half of the year, investment activity increased 3% nationally, over 2017, and the second quarter alone increased 41% year-over-year, according to research from Newmark Knight Frank. The Western US has lead the increase in activity, increasing 33% year-over-year and 96% for the second quarter alone. Despite the headlines, investment activity has grown steadily since early 2015.

“With the country coming off of ten straight quarters of decline, investor uncertainty due to a combination of interest rate speculation and volatility, continued retailer consolidation, bankruptcies and general uncertainty coupled with a lack of refreshed pricing data points seems to have calmed,” Glenn R. Rudy, senior managing director of retail investments at NKF Capital Markets, tells GlobeSt.com. “With the increased volume the surge in data points is leading to realistic pricing discovery and abundant capital is ready to continue this positive trajectory.”

In addition to popularity of West Coast markets, secondary markets are also seeing an increase in activity, and are actually trending above primary markets in terms of sales volumes. “Secondary markets, which historically have always trailed primary markets in terms of overall activity, outpaced primary markets through the first half of 2018 by a significant margin,” says Rudy. “This is primarily due to the sheer lack of available product in primary markets and its correlated pricing.  However, now that there are some additional data points supporting today’s pricing in these secondary markets, the yields have simply been too attractive for capital, starved for allocation, to resist.”