What are the major retail market trends driving today’s real estate economy? That is a huge question, but luckily SVN’s Shari Tucker-Gasser has some answers. As the National Council Chair of Multi-Tenant Retail for Sperry Van Ness, LLC, Tucker-Gasser shared some of her expert retail market insights with GlobeSt.com at this year’s RECon in Las Vegas, Nevada.
Retail Market Insights: 5 Key Takeaways
1. Real estate investment trusts (“REITs”) are dominating the retail market space. This means that it’s a tough market for independent investors, who can’t compete with the deep pockets of real estate investment trusts. With greater financial resources, REITs have the ability to take more risks with their property investments. This shuts many independent investors out of the market, because they can’t afford what REITs are willing to pay for properties.
2. Anchors are popular, but not a necessity. Due to the threat of an anchor possibly vacating, some investors prefer to buy unanchored strip centers. So while independent investors may be excluded from certain deals because of powerful REITs, they still have some attractive (and affordable) investment options.
3. “Green” properties in urban areas are purchased based on curb appeal. People often enjoy being able to say that they purchased renovated or “recycled” properties. “Green” buildings are trendy and appealing for certain types of investors, who are typically not as motivated by cash.
4. Revitalization projects can be attractive and mutually beneficial. Developing an area is exciting, because you are uplifting a previously struggling community. Millennials tend to prefer inner city areas, where they can easily commute to work and spend time with their peers. This poses a great opportunity for developers, who can revamp inner city communities to meet the needs of the growing number of city-dwellers.
5. The lack of good leasing brokers is a problem. Due to the recession, many good brokers have left the business. The industry needs a new crop of talented leasing brokers to sustain the commercial real estate field. This new breed of brokers will not appear overnight, but Tucker-Gasser remains optimistic.
To read more on retail markets in the commercial real estate industry, download the 2015 Retail Market Update report here.