March 9, 2016
Connect Media spoke with Matthews Real Estate Investment Services’ El Warner, who specializes in the disposition of institutional assets, to better understand the state of retail real estate. Warner is a panelist at Connect Retail West on March 16th at the Conga Room at LA Live.
1 – Why are so many retailers closing and how should landlords adjust?
We are seeing strategic resizing of certain tenant verticals, due to consolidations. Landlords need to make sure they fully understand the demographics and consumer needs within a certain submarket. By creating a synergistic tenant line up around providing a higher level of entertainment, landlords can make sure the tenants they select will have medium term viability.
2 – How is e-commerce impacting the market?
We are seeing a shift on all levels to make sure that retailers are able to not only embrace e-commerce but also utilize e-commerce to separate them from their competition. Even the grocer market is trying to figure out a way to take advantage of technologies to create more market share within their competitive set.
3 – What’s ahead in 2016 for the retail sector in SoCal?
From an investment sales perspective, we are still seeing demand for core product within core locations. In 2016, there will continue to be extreme shortages of supply of viable retail assets in the market in comparison with demand, keeping prices for core assets at the historically low cap rates despite a potential uptick in interest rates.