{"id":1004096947,"date":"2014-05-21T10:32:32","date_gmt":"2014-05-21T18:32:32","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004096947"},"modified":"2022-12-02T22:57:40","modified_gmt":"2022-12-03T06:57:40","slug":"recon-special-report-top-executives-offer-retail-insights-at-annual-marcus-millichap-event","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/recon-special-report-top-executives-offer-retail-insights-at-annual-marcus-millichap-event\/","title":{"rendered":"RECon Special Report: Top Executives Offer Retail Insights at Annual Marcus & Millichap Event"},"content":{"rendered":"

By Paul Rosta, Senior Editor<\/p>\n

A diverse lineup of executives created a snapshot of a resurgent, fast-changing retail real estate sector at the annual panel discussion hosted in Las Vegas on Monday by Marcus & Millichap Real Estate Investment Services Inc.<\/p>\n

\"Hessam<\/a>

Hessam Nadji, Fernando Leon, Rahul Sehgall, Michael Phillips, Ted Frumkin and moderator Bill Rose discuss retail trends at Marcus & Millichap’s annual event in Las Vegas on May 19.<\/p><\/div>\n

As always, the session coincided with RECon, the International Council of Shopping Centers\u2019 annual spring dealmaking and educational event, which concluded on Tuesday.<\/p>\n

\u201cThe consumer that was supposed to shut his wallet and hide in the caves is back,\u201d asserted Hessam Nadji, Marcus & Millichap\u2019s executive vice president & chief strategy officer, told an audience of several hundred at the Renaissance Hotel. Nadji pointed to retail sales volume, which is 14 percent greater than it was at its pre-recession peak. Vacancy levels vary widely around the country, but those figures can be misleading, he explained. Even in the nation\u2019s three highest-vacancy markets\u2014Atlanta, Las Vegas and Detroit\u2014vacancy is on track to decline significantly this year, Marcus & Millichap projects.<\/p>\n

Nadji marshaled further evidence that the economy is performing far better than is usually perceived. \u00a0Private-sector jobs now surpass pre-recession totals, and 2.4 million new jobs have been added in the past 12 months alone. Over the next 12 to 24 months, unemployment should decline to between 5 percent and 5.5 percent. Other positives include pent-up demand for 3 million-plus housing units and household wealth that exceeds 2007 levels. \u201dThere is always uncertainty, but based on the numbers, I think this recovery is sustainable,\u201d Nadji said.<\/p>\n

Moreover, markets beyond the largest metropolitan areas provide ample opportunity to retailers willing to try new locations and formats. Knocking preconceptions into a cocked hat, grocery stores featuring healthy and organic products are proving to be a hit in the heartland. \u201cWe do very well in Oklahoma,\u201d reported Ted Frumkin, senior vice president of business development for Sprouts Farmers Market. The chain\u2019s current goal is to expand from its current roster of about 170 stores to 1,200 stores, but Frumkin added that identifying suitable locations for new stores remains a significant challenge.<\/p>\n

Panelists also shed light on the main challenges and opportunities facing retail real estate. One common theme was online retail. As Nadji related, Internet sales increased 58 percent between December 2008 and March 2014, far outpacing the growth rate of conventional retail sales. But while online and traditional retail compete for customers to some extent, executives insist that online retail is supplementing, not supplanting, traditional store formats.<\/p>\n

\u201cYes, we have growth in the non-brick-and-mortar sector,\u201d Phillips observed, \u201cbut you\u2019re seeing (leading online retailers) go brick and mortar.\u201d Frumkin added, \u201cWhat we as retailers have to figure out is how to integrate that component of the shopping experience in the store:\u201d Example: the expanding use of smartphone apps in traditional shopping.<\/p>\n

To round out the discussion, moderator Bill Rose, vice president & director of Marcus & Millichap\u2019s national retail group, asked the panel to offer the audience one piece of advice. The deceptively simple question yielded revealing responses.<\/p>\n