Retail is definitely the most challenging asset class in the current market; however, the continue to be opportunities to succeed. Just as investors are finding quality acquisition opportunities, lenders are also open to the right retail deals, whether for acquisition, redevelopment or ground-up construction. While retail can present more challenges than the more in-vogue assets—think industrial—if lenders can understand the value proposition on a retail asset, the deal has legs.

“Retail developments, acquisitions and redevelopments are somewhat challenging in the current market,” Malcolm Davies, principal and managing director at George Smith Partners, tells GlobeSt.com. “That said, capital markets are strong, and it is possible to finance retail product in the current market. In fact, we are closing a $60 million construction loan on a 208,000 square-foot grocery anchored shopping center right now and recently closed financing on the repositioning of a 180,000 square-foot retail center which had lost its grocer anchor, and were able to back fill this space with a fitness/gym tenant. Lenders simply need to see and understand the property's value proposition clearly, and they must believe in the sponsor and in the vision for the property's future.”