{"id":1004740925,"date":"2024-12-17T02:56:49","date_gmt":"2024-12-17T10:56:49","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004740925"},"modified":"2025-01-16T06:08:31","modified_gmt":"2025-01-16T14:08:31","slug":"icsc-special-report-whats-ahead-for-retail-investment-development","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/icsc-special-report-whats-ahead-for-retail-investment-development\/","title":{"rendered":"ICSC Special Report: What’s Ahead for Retail Investment?"},"content":{"rendered":"\n

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\"People<\/a>
Retail real estate professionals talk deals at ICSC’s annual New York City event. Photo by Paul Rosta<\/em><\/figcaption><\/figure><\/div>\n\n\n

After a slow year for capital markets and investment, executives attending ICSC\u2019s annual New York City event found reason to expect broad-based momentum to benefit the retail sector in 2025.<\/p>\n\n\n\n

\u201cWhat is a little different is that a lot of institutional capital that\u2019s been sitting on the sidelines is starting to get impatient,\u201d Joseph Lowry, senior vice president for business acquisitions and development at Levin Management Corp, said last week. Returns in the sector are more attractive compared to other property types, he added.<\/p>\n\n\n\n

The biggest recent example of the new institutional interest in the sector is Blackstone\u2019s $4 billion acquisition<\/a> of Retail Opportunity Investments Corp. The purchase of the grocery-anchored REIT specialist represents \u201cthe first time that Blackstone has been active in our space in a very long time,\u201d noted Jeff Edison, chairman & CEO of Phillips Edison & Co. A big plus for retail real estate investment, Edison added: \u201cThe psychology is starting to move toward a more consistent view that we\u2019re in a stable environment.\u201d<\/p>\n\n\n\n

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READ ALSO<\/strong>: ICSC Special Report: Retail\u2019s Big Space Race<\/a><\/p>\n\n\n\n

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Along with stepped-up interest from institutional investors, ICSC attendees predicted that debt capital will be more available. \u201cWe expect more lenders to enter into the market,\u201d said Matthew Mousavi, senior managing principal & national co-head of net lease and west investment properties at SRS Real Estate Partners. Likely examples: smaller banks, credit unions and CMBS issuance, he added.<\/p>\n\n\n\n

Boosting investor appeal<\/h2>\n\n\n
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\"Photo<\/a>
Newmark’s Brandon Isner cites densification as a key trend for retail redevelopment during ICSC’s annual New York City trade show. Photo by Paul Rosta<\/em><\/figcaption><\/figure><\/div>\n\n\n

Multiple factors may be adding to retail assets\u2019 appeal to investors. \u201cThe store has become much more active in the overall supply chain,\u201d observed Brandon Isner, head of retail capital markets research at Newmark. <\/p>\n\n\n\n

The retail supply chain has become dramatically more efficient over the past 10 to 15 years, as the inventory-to-supply ratio has improved drastically, he added. Stores fulfill a significant share of online purchases, and when customers return items to stores, they regularly buy something else.<\/p>\n\n\n\n

A variety of capital markets challenges will linger into 2025. \u201cRefinancing is top of mind for us,\u201d because of the elevated cost of capital when loans come due. A property may have been financed at 3.5 percent, but that rate won\u2019t be available again when the time comes, he noted. Nevertheless, he added, \u201cWe\u2019re not seeing a flood of distress.\u201d<\/p>\n\n\n\n

Retail redevelopment rises<\/h2>\n\n\n\n

Site selection and financing remains a challenge in much of the country. That points to redevelopment as a strategy of choice. Densification of retail properties with multifamily, office or other asset categories can be a winning strategy all around. As Isner noted, \u201cOffice joined to retail will (often) outperform the market as a whole.\u201d<\/p>\n\n\n

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\"Two<\/a>
Financing continues to make ground-up construction a challenge, noted Levin Management Corp. executives. From left, Matthew Harding, Melissa Sievwright, Joseph Lowry. Photo by Paul Rosta<\/em><\/figcaption><\/figure><\/div>\n\n\n

\u201cLandlords are looking to bring an older property up to current standards,\u201d noted Levin Management CEO Matthew Harding. At Blue Star Shopping Center, a grocery-anchored property in Watchung, N.J., the firm recently led a makeover highlighted by upgrades to such areas as landscaping, parking and facades. <\/p>\n\n\n\n

The $12 million project also features new public space and infrastructure for electric vehicle charging. A ground-up, 72,000-square-foot Shop Rite will replace the supermarket chain\u2019s former store at the center, which will be reconfigured to accommodate multiple tenants.<\/p>\n\n\n\n

Mixed-use redevelopment will also continue to be a key strategy. \u201cNobody\u2019s building 1 million-square-foot retail anymore,\u201d observed Kristin Mueller, president of JLL\u2019s property management unit.<\/p>\n\n\n\n

She cited Bluhawk, a mixed-use destination in Overland Park, Kan., as a showcase for the new wave of retail development. Developed by an affiliate of Price Brothers, the property offers retail, residential and office components. In what\u2019s said to be the first anchor of its kind, the property is anchored by AdventHealth Sports Park at BluHawk. The $125 million, 420,000-square-foot indoor sports and entertainment complex offers an ice rink, basketball courts, a family entertainment component and a training center. \u201cRetail is being redeveloped in close proximity to these non-traditional anchors,\u201d Mueller noted.<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

A roundup of insights from last week’s show in New York City.<\/p>\n","protected":false},"author":445,"featured_media":1004740920,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21782,21808,21783,21742,21749,51037],"tags":[],"class_list":["post-1004740925","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-development","category-featured","category-investment","category-latest","category-retail","category-trends"],"acf":[],"yoast_head":"\nICSC Special Report: What's Ahead for Retail Investment? - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"Executives attending ICSC\u2019s annual New York City event found reason to expect broad-based momentum to benefit the retail sector in 2025.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/icsc-special-report-whats-ahead-for-retail-investment-development\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"ICSC Special Report: What's Ahead for Retail Investment?\" \/>\n<meta property=\"og:description\" content=\"Executives attending ICSC\u2019s annual New York City event found reason to expect broad-based momentum to benefit the retail sector in 2025.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/icsc-special-report-whats-ahead-for-retail-investment-development\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2024-12-17T10:56:49+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-01-16T14:08:31+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2024\/12\/ICSC-crowd-shot-3_800x600.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"600\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Paul Rosta\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/icsc-special-report-whats-ahead-for-retail-investment-development\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/icsc-special-report-whats-ahead-for-retail-investment-development\/\",\"name\":\"ICSC Special Report: What's Ahead for Retail Investment? 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