May 24, 2018
Retail investors remain in a buying mode, as they focus on finding assets that can meet the changing needs of today’s consumers and produce desirable returns. Real Capital Markets’ (RCM) “May 2018 Retail Investor Sentiment Report” found the most attractive property type was anchored centers, particularly those with strong grocery operations.
RCM’s Steve Shanahan says, “Retail may be the most diverse and bifurcated of all commercial real estate asset classes. Certain subsets of retail perform well, are in great demand and push the market in terms of price and value. Others have issues, and are part of what is leading investors to consider other options, such as exploring other asset types.
While big box vacancies and high-profile store closures are adversely affecting parts of the industry, investors surveyed noted optimism in other retail segments. Owners embracing new models—experiential focused or some mixed-use elements—are likely best-positioned to succeed.
The report explored how experiential retail is the wave of the future, how Class A malls and grocery-anchored centers are performing well and are in great demand, how big box vacancy is now viewed as the greatest threat to those investing, and the trend toward investors considering alternative CRE investments to retail.
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