Each Wednesday, The Wrap presents a compilation of recent noteworthy commercial real estate stories from a variety of publications. Below are five items that caught our eyes in recent days. You'll notice a heavy emphasis on pieces from the 2012 ICSC RECon conference and trade show, which concludes today.
• "Retail Industry is Optimistic, But Still Wary" – By Susan Piperato of Retail Traffic.
“Cautious optimism.” That’s how Piperato described the mood at the 2012 ICSC RECon conference and trade show.
A survey of the 350 attendees of the show’s CBRE Capital Market Luncheon revealed that 58 percent agree with the statement “Things are better than last year, but not great,” Piperato reported. Thirty-two percent agreed with the statement “Things are better than last year [and] we’re out of the woods.”
“There’s no euphoria, but at the same time it’s not the opposite either,” said Spencer Levy, executive managing director of capital markets for CBRE and the luncheon’s moderator.
Daniel Mullinger, an executive vice president of PNC Real Estate, told Piperato his firm is seeing increased transaction volume but also noted retail developers remain somewhat “tentative.”
“[Developers are] telling us they need to have [leasing levels that] are higher than they were in the past. … We’ve had clients that said they want to be 70 percent or 80 percent leased before they start,” Mullinger said. “That’s higher levels than [in] 2006 and 2007.”
• "Retail Landlords Sigh in Relief as Leasing Activity Gains Momentum" – By Elaine Misonzhnik of Retail Traffic.
While retail development has yet to get fully back on track, landlords attending RECon reported a heartening uptick in the leasing of their existing properties, Misonzhnik reported. Retailers in the dining, specialty apparel, department store and entertainment segments have all shown growth recently, RECon attendees said.
The resulting drop in vacancies means that prime shopping locations can finally be more aggressive with rents, Misonzhnik noted. However, one area of the market that is still struggling is small-shop space, which has not seen as promising gains in rent. The major holdup? It’s hard for mom-and-pop retailers to get financing.
Another “good sign that retailers are seriously looking at expansion is that a lot more retail CEOs and CFOs are attending this year’s RECon than in the past,” Misonzhnik wrote. “The C-level executives have become much more involved in real estate decisions since the downturn.”
• "RECon Panelists: Social Media Key to Driving Retail Concepts" – By Natalie Dolce of GlobeSt.com.
Social media is more than just a means for checking up on your ex-boyfriend or girlfriend. It’s a technology that can provide tremendous benefits to retailers and retail managers and help them overcome current market challenges, according to an ISCS RECon 2012 panel discussion detailed by Dolce. Panel members included property and asset managers.
According to Bill Goeke, senior vice president and director of Weingarten Realty Investors, social media outlets like Twitter and Facebook are outstanding marketing tools because they are free and give both consumers and possible investors constant updates on company news.
The panel was quick to note, however, that social media requires effort and a plan. Gregory Carbone, director of property operations at EDENS, said that in order for social media to be an effective resource “you have to be dedicated to it and see the value in it.”
• "CRE Price Recovery Continues Despite Seasonal Volatility" – By Randyl Drummer of CoStar.com.
Things aren’t exactly booming in commercial real estate (other than the multifamily sector) but property pricing continues to improve. CoStar’s U.S. Composite Index ended the first quarter 4.3 percent higher than it was at the same point one year earlier.
Price recovery is also moving into non-core and secondary markets, according to Drummer.
“As fundamentals have continued to improve, the Office Index has shown sustained pricing growth over the past year,” Drummer wrote. “Office prices are up 13.1 percent over year-ago levels, the largest annual increase among the five primary property types.”
• VIDEO: "RECon 2012: Retailer Expansion Trends" – From ICSC Television.
The video clip below from ICSC’s Shopping Centers Today magazine details the store expansion plans of several retailers. The video also discusses the downsizing of retail space, companies looking for higher returns on investments abroad and interest from foreign retailers in America.