Saturday, November 17, 2012

U.S. Retail Sector Showing Definite Signs of Progress



Dan Fasulo
 ATLANTA, GA– Although its recent performance has generally been regarded as trailing the other U.S. commercial real estate sectors, the retail real estate market continues to show unmistakable signs of improvement, particularly in urban infill areas.

 The most recent episode of Michael Bull’s “America’s Commercial Real Estate Show” provided an enlightening update on the sector. Bull and his guests discussed transaction volume, consumer spending, active tenants and the types of properties sought by investors.

Michael Bull
Investments sales of U.S. retail properties totaled $9billion in third-quarter 2012, up slightly from the same period last year, said Dan Fasulo, managing director of Real Capital Analytics. Through the first nine months of 2012, retail investment sales totaled $35 billion, an increase o fabout 5 percent from the first three quarters of 2011, Fasulo added.

 Fasulo also predicted the fourth quarter to be a busy one in terms of investment sales, in part because continuing concerns about potential future tax increases will motivate owners to sell before higher rates might kick in. “I think there’s going to be a flurry of closings by year end,” he said.


Michael Niemira
Meanwhile, holiday retail sales should increase this year by about 3 percent when compared with last year, said Michael Niemira, chief economist for the International Council of Shopping Centers. “That’s a little bit slower [growth] than the year before but still not a bad performance historically,” he said.

 Mixed-use properties in centrally located urban areas are prospering, while their suburban counterparts continue to struggle, noted Michael Cohn, executive vice president for Cousins Properties. “Urban markets are seeing rent escalation, healthy absorption, a tremendous inflow of new retailers and expansion,” he said. “If you’re still in it with a mostly suburban portfolio, your portfolio is probably lagging somewhat and still a bit of a victim of the last cycle.”

Michael I. Cohn
Quick-serve restaurants and healthcare firms are two of the more active tenants in today’s marketplace, Cohn added.

REITs and institutional buyers are exhibiting a healthy appetite for core properties in gateway markets, said John Harrison, a broker in Bull Realty’s National Retail Group. Private equity firms also have significant interest in value-add and Class-B properties.

John Harrison
“There is money to invest in the distressed retail segment, and buyers are courageous and tackling opportunities that require a lot of imagination,” Harrison said.

 The entire “U.S. Retail Market Update” episode is available for download at www.CREshow.com.

Contact:

Stephen Ursery
Wilbert Public Relations
Office: (404) 965-5026
Cell: (404) 405-2354




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