Donna M. Mitchell

After years of double-digit increases in rents, high street retail landlords are in the second year of double-digit declines.

“Landlords have known this was coming for 10 years,” says Scott Holmes, a senior vice president and national director of the national retail group at brokerage firm Marcus & Millichap.

Cap rates for properties occupied by high-quality tenants, such as 7-Eleven, have achieved cap rates between high 4 percent and low 5 percent in the fourth quarter of 2017.

Mixed-use centers are expected to be among the better-performing assets in the retail sector, as the industry moves away from shopping centers and enclosed malls.

The flow of liquidity will be tempered and reserved to the most desirable property sub-types and geographical markets.

The restaurant tenants tend to have leases that feature 10 percent rent escalations every five years or 2 percent rent escalations annually.

Unibail-Rodamco and Westfield executives have been talking on an off about an acquisition for about four years before taking the plunge.