LAS VEGAS, NV - Fueled by luxury retailers and discount retailers such as dollar stores, the retail real estate sector is poised to experience increased leasing and improving fundamentals in the second half of 2012. That’s the take of Hartman Simons, an Atlanta-based national commercial real estate law firm that represents both tenants and landlords in retail leases as well as developers in retail developments.
The firm’s attorneys provided their analysis of the sector as the 2012 ICSC RECon convention got underway in Las Vegas. The convention began on May 20 and will run through May 23.
“The amount of leasing activity we’re involved in is 10 times what it was a year ago,” said Peter Hartman (top right photo), a partner with the firm. “Of course, it’s all relative. It’s not yet close to where it was in 2006 or ’07.”
“Retail real estate is certainly healthier and moving in the right direction,” Hartman said. “There have been fits and starts, but overall the entire sector from our perspective is greatly improved.”
The return of some large and important retailers such as Target to new developments and the growth of discount retailers like Dollar General are two of the trends fueling the sector’s increased development and leasing activity, according to Hartman. The firm has recently represented developers in the development of Target-anchored centers in the Southeast.
As for store performance, luxury and discount retailers are both thriving, Hartman said. “It’s the mid-level space that seems to be pretty flat,” he added.
Retail developers have grown “selectively aggressive” in pursuing new opportunities in part because financing has become easier to obtain, according to Hartman. And those new opportunities usually involve residential and sometimes office uses, he said.
“Everybody’s big on having a multifamily component, or at least being near multifamily,” Hartman said.
Hartman Simons is representing North American Properties in its development and construction of Avalon (lower left photo), a $600 million, mixed-use project in suburban Atlanta.
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That would be a nice prediction. But there are still things you will need to consider with this kind of predictions.
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