Proactive industry leaders are looking ahead and sharing the things they are seeing.As industry leaders continue to gather in Las Vegas for the International Council of Shopping Centers RECon 2017, there seems to be even more interest than usual in what industry leaders have to say about the state of the industry. Those that were hoping for some positive signs from the show have been pleasantly surprised with the overall optimistic tone being displayed by attendees, and that makes it pretty clear that all the doom and gloom stories have been fairly overblown. As NREI explains, proactive industry leaders are looking ahead, and they’re not shy about sharing the things they are seeing.
There have been plenty of questions making the rounds about what the contraction in the retail sector will mean for rents as a whole. While there may be some leveling out for a little while, the general expectation is that any slight downturn will not become a long-term trend.
“Rents going down on Madison and Fifth [in New York City] is maybe a sign of what’s to come,” said Michael Weiner, president of Excess Space Retail Services. “I think we’ll have a softer landing than maybe what some people have in their minds.”
“Today our portfolio is better positioned than ever and our balance sheet is better than it’s ever been,” notes Katie A. Reinsmidt, executive vice president and chief investment officer with regional mall REIT CBL & Associates Properties.
On the investor side, there is a sense of caution in the air, but that’s true of virtually every market that is not currently in the midst of a bubble.
“I haven’t had a landlord in the past six months who was willing to take a firm stand on [space] recapture,” said Michael N. Hirschfeld, co-lead of the national retail tenant services group with JLL.
“There are value-add buyers who are opportunistic, but they are being very selective,” according to Ryan Imbrie, managing director and retail product council chair with brokerage firm SVN.
Add it all up, and industry leaders are overall optimistic about the future, but they note that some caution is prudent while some of the larger retailer contractions play out.
“But we are more cautious pricing-wise,” noted Jeffrey S. Edison, principal and CEO of Phillips Edison & Co.“Everyone is looking around and saying ‘If we have further deterioration in the anchor space, who’s going to replace it?” Edison added.