Retail Supply Hasn't Caught Up With Demand

IRVINE, CA—Lack of product has caused pricing to remain strong in the West Coast retail sector, especially for the best properties, HFF's managing director Gleb Lvovich tells GlobeSt.com. As we recently reported, Lvovich recently joined the firm to focus on retail investment sales throughout
Southern California and the West Coast. We spoke exclusively with him about his new role with the firm and trends he sees in West Coast retail investment.

GlobeSt.com: What are your goals in your new role with HFF?

Lvovich: To grow HFF's market share from our already strong position to become the dominant capital-markets intermediary for retail properties along the West Coast. Our shared platform, which is client focused and team oriented, is unique to the business, and I'm looking forward to working as an advisor to current and new clients of the firm.

GlobeSt.com: What are the major trends you're seeing emerging in West Coast retail investment?

Lvovich: Supply has yet to catch up with demand, and this lack of product has caused pricing to remain strong, especially for the best properties. We are also seeing strong pricing and demand in secondary markets as investors search for yield.

GlobeSt.com: In which geographical areas of the West Coast are retail investors most interested in purchasing property?

Lvovich: The core gateway markets (infill SoCal, Bay Area and Seattle) are on top of everyone's list. However, we are starting to see strong pricing in MSAs such as Portland and Phoenix.

GlobeSt.com: What else should our readers know about West Coast retail investment?

Lvovich: The fundamentals are strong, with vacancy rates at +/-5% in the core gateway markets with limited deliveries of new supply and very little under construction.