LAS VEGAS-Bill Rose, national director of Marcus & Millichap’s National Retail Group, tells GlobeSt.com that he was impressed during the recent ICSC RECon event here at how sincere people in the industry believe in a recovery. The company was one of many that hosted panel discussions by retailers who are looking to grow again after a few years of internal retooling.
“In Vegas, there’s always an amount of ‘fluff’,” he says, referring to companies putting on positive spin. “But in the specific meetings I was in, and deal-flow conversations I had, it was clear that there’s absolutely been a rebound, with recessionary trends behind us. The retailers I spoke with, such as Safeway and Walgreens, were all very upbeat.”
According to the company’s Single Tenant Outlook report for the first half of 2011, total store closures fell nearly 40% from the first half of 2010 figures, as retailers began capitalizing on a return to consumer spending. Value-based merchants and drugstores lead expansion discussions, and big-box stores such as Target, Wal-Mart and Best Buy make plans to open new urban stores.
However, while capital has started to flow into the retail market, especially in core markets, there’s still not enough positivity to begin new large development centers, Rose says. A shortage of single-tenant properties listed with credit tenants will persist until builders step up activity and national retailers expand to a greater extent. “We’re not going to see new lifestyle centers being planned yet, that’s not going to occur until vacancies can be absorbed,” Rose says. “Job growth still has a ways to go. The major chains have been working to redevelop existing stores, they’re going to want to make sure there’s sustained stability before looking for new building again.”
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