The frenzy of meetings and cocktail parties is over. And most of the 33,000-plus attendees of ICSC’s RECon 2013 have gone home tired, but satisfied.
Conditions for the retail real estate have settled into a groove. Fundamentals have ticked up. Capital markets continue to loosen. Retailers on the mend and new concepts are out looking for space. That created the perfect conditions for investors, retailers and brokers to get together and talk brass tacks at the Las Vegas Convention Center this week.
What’s most promising is the fact that many retailers are no longer in defensive modes. Instead, with sales rising they are signing extensions and looking for ways to grow portfolios. And new players are coming on the scene as well.
“We’re having a lot more dialogue on rollouts and growth driven by strategy vs. decisions driven by a limited capital budget,” says Greg Schuster, senior managing director and principal of corporate services with Cassidy Turley. “We’re seeing a lot of new brands challenging the mature brands. And there is reinvention of brands. … So we’re going to see a lot of change in the retail space.”
Leasing brokers and owners talked of improving spirits and the increased willingness to sign deals.
“Every one of the landlords we talk to, feels good,” says Andrew Graiser, co-president with services firm A&G Realty Partners. “Retailers are growing, but they are being a lot more nimble and flexible in regard to square footage.”
Francis X. Scire, Jr., assistant vice president, leasing with Simon Property Group echoes that sentiment, “In my centers, I see absolutely that the tenants that were on hold for a while are looking at new opportunities.”
And it’s happening markets across the country.
“I believe there is pent-up demand for space and we see that from the retailers we represent,” says Mark Keschl, national director with Colliers International’s retail services group. “There are many markets where there’s not enough retail development. Washington, D.C. is one, in South Florida we’ve absorbed all of the former Circuit City and Linens ‘n Things boxes, Northern California is very tight.”
The situation is strong enough that landlords aren’t even sweating the issues facing JC Penney and the potential that the department store chain may have to close stores.
“We thought that they had great strategy that got out of the gate wrong,” says Michael P. Glimcher, CEO of Glimcher Realty Trust. “But we think some of those components will work. They’ve also go some capital from Goldman. That gives them time. … However, we don’t mind turning space. In fact, with occupancies at 95 percent for the first show in a long time we have the upper hand as a landlord.”