Financing retail in this cycle is a far cry from the golden days of retail pre-recession. With lenders today much more conservative and innately more forward thinking (i.e. payoff cap rates, square footage contraction and tenant consolidation, to name a few) than ever before, properties that would have had no trouble achieving financing in 2004–2006, aren’t getting double takes in today’s market.

In the past, lenders instinctively looked at centers with large credit tenants, such as a Walmart or Best Buy, as a good investment based on the theory that bigger was better. The market was in a state of euphoria, and lenders and investors alike did not see an end to retail’s success.

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