RECon attendees detailed strategies for major renovations and reported renewed interest in the sector from institutional capital sources.
Judging by conversations with a few of the developers and project managers at RECon on Monday, a steady stream of gloom-and-doom headlines has failed to dampen enthusiasm for investment in retail center makeovers. Those at the International Council of Shopping Centers’ annual spring event came to the Las Vegas Convention Center eager to talk deals, redevelopment, technology and the growing overlap of online and brick-and-mortar.
“Brick-and-mortar retail is not dying,” declared Ashlyn Booth, senior vice president & director of retail property marketing for JLL. “I think it’s a very exciting time to be in retail.” During a conversation at JLL’s exhibit space, she discussed the redevelopment of Manhattan Village, a $180 million project that JLL is overseeing in Manhattan Beach, Calif., an upscale beach community and Los Angeles suburb.
Along with new restaurants, a parcel redeveloped with boutique shops and a parking structure, and medical office buildings, Manhattan Village will host that rarity—a department store that is getting bigger. An expanded 168,000-square-foot store linked by a pedestrian bridge to a new parking structure is scheduled for completion this year. “It speaks to their customers that Macys would want to expand,” Booth commented.
Operators of Class B properties also said Monday that they see opportunity in the evolution of retail, rather than an existensial threat. Starwood Retail Partners, a six-year-old affiliate of Starwood Capital, created a detailed strategic plan for each of its 30 properties.‘We’re very focused on the highest and best use at each property,” explained Laurie Paquette, senior vice president of property management.
In redeveloping The Shops at Willow Bend in Plano, Texas, Starwood Retail brought in Plano Children’s Theater, which occupies a 20,000-square-foot space. Not so incidentally, the presence of the youth performing arts company serves as a magnet, not only for children but for their parents. A gymnastics school at Rimrock Mall in Billings, Mont., serves a similar purpose. Paquette’s takeaway from these new additions to the tenant mix: “We have to change how we look at the space.”
Institutional capital sources are significantly more open to retail than they were at RECon in 2017, reported Josh Poag, president & CEO of Poag Shopping Centers. Most institutional investors Poag speaks with these days are now open to placing capital in the sector, compared to only about one quarter a year ago. The negative press that has scared off so many potential investors may offer a silver lining, he noted; the perceived decline in retail asset values has made pricing more attractive. That increases the chances that Poag will acquire properties in increasing the odds that the company will go into the acquisition market in the next year or two, he noted.
Top to bottom, it still feels like things are very healthy,” concluded Kenneth Katz, co-founder and principal at Baker Katz, a Houston-based developer and operator. One intriguing phenomenon is that cap rates for net-leased properties haven’t budged despite rising interest rates, he noted.
By Paul Rosta
Read the Original Article HERE
Archives
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
- August 2020
- June 2020
- May 2020
- April 2020
- March 2020
- February 2020
- January 2020
- October 2019
- September 2019
- August 2019
- May 2019
- April 2019
- February 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- February 2018
- January 2018
- December 2017
- November 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017
- January 2017
- November 2016
- October 2016
- September 2016
- August 2016
- July 2016
- June 2016
- May 2016
- April 2016
- March 2016
- February 2016
- January 2016
- December 2015
- November 2015
- October 2015
- September 2015
- July 2015
- June 2015
- May 2015
- April 2015
- March 2015
- February 2015
- December 2014
- November 2014
- August 2014
- July 2014
- May 2014
- April 2014