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| Michael Bull at the mike |
ATLANTA, GA – With commercial
real estate investors searching for higher yields, investment sales of retail
properties have spiked, and buyers are showing more interest in purchasing
properties in secondary and tertiary markets.
That was one of the market insights provided on the most recent
episode of the “Commercial Real Estate Show” radio program, hosted by Michael
Bull of Bull Realty.
The episode provided an
enlightening look at the U.S. retail sector. Topics included investment sales
volume, in-demand markets, the federal Marketplace Fairness Act and the
upcoming RECon 2013 convention in Las Vegas.
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| Dan Fasulo |
Retail investment sales totaled more than $20 billion in
fourth-quarter 2012, a pace not seen since before the Great Recession, said Dan
Fasulo, managing director of Real Capital Analytics (RCA). The brisk
activity was fueled in part by sellers’ motivation to close deals before higher
capital-gains tax rates took effect early this year, he added.
Overall, nearly $53 billion of retail investment sales were
completed in 2012, a 20 percent increase from the year before, according toRCA.
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| Laurel David |
“There were a lot of buyers, institutional investors, that had
focused on office and multifamily earlier in this recovery cycle, but who have
now shifted to other property sectors like industrial and certainly retail
because of the higher yields available,” Fasulo said.
Nationwide, retail cap rates average just above 7 percent, a mark
that has remained the same for several years. However, “you’ve got to dig
underneath [that average],” Fasulo said. “Where we have seen some cap rate
compression recently is in the secondary and tertiary markets, which were late
to the party a little bit.”
In another positive development for the retail sector, the federal
Marketplace Fairness Act, which would give states the authority to require
large Internet retailers to collect state and local sales taxes at the point of
sale, seems to have a good chance of soon becoming law, said Laurel David,
an attorney with The Galloway Law Group and the chair of the ICSC Georgia
Government Relations group.
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| President Barack Obama |
The bill is slated for a Monday vote in the U.S. Senate, where it
appears to have broad bipartisan support. If passed in the Senate, it would go
to the House. President Obama has indicated he would sign the
legislation if passed by Congress, David said.
Bricks-and-mortar retailers, who do have to collect
sales taxes at the time of a transaction, support the legislation because they
feel the current system gives an unfair advantage to their online counterparts,
and state and local governments are behind the measure because of the tax
revenue they lose.
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| Jesse Tron |
Even though consumers are
technically required to eventually pay sales taxes for their online purchases,
hardly any ever do, and the result is that state governments lose $23 billion
in taxes each year, David said.
“The bill will level the playing field,” David said.
Indicative of the gathering momentum in retail real estate, the
International Council of Shopping Centers’ (ICSC) annual RECon convention is on
pace for a noticeable increase in attendance, according to Jesse Tron,
communications manager for ICSC.
The show is
the sector’s largest convention by far, and should draw 33,000 to 35,000
attendees this year, up from about 32,000 in 2012, Tron said. “I think the buzz
(about the industry) has picked up, probably the most since the recession,” he
said.
The entire episode on the U.S. retail market is available for
download at
www.CREshow.com. The next “Commercial
Real Estate Show” will be available May 9 and will examine the U.S. multifamily
market.
For a complete copy of the company’s news release, please contact:
Stephen Ursery
The Wilbert Group
Office: (404) 965-5026
Cell: (404) 405-2354
·
Opportunistic Debt Refinancings – Refinanced $80 million of debt,
lowering the average interest rate on fixed-rate debt by approximately 80 basis
points, enhancing earnings and extending weighted average maturity to 2020. 
