Even though the retail sector continues to strengthen, lenders don’t find retail properties as attractive as they find multifamily and industrial assets. With the exception of grocery-anchored centers and fortress malls, lenders are cautious when it comes to retail real estate, experts say.
Private equity firm Sycamore Partners plans to acquire department store chain Belk Inc. for $3 billion. Charlotte, N.C.-based Belk, which is the nation’s largest family-owned-and-operated department store chain, with close to 300 stores in 16 southern states, posted annual sales of $4.11 billion in for fiscal year 2015.
American consumers are finally spending again, which is good news for retailers and retail property owners. The increased spending corresponds to improved consumer confidence, and experts expect that trend to continue.
Investor demand for net-lease quick-service restaurant (QSR) properties is hotter than an order of McDonald’s French fries. The price point, coupled with long-term leases, rental escalations and recognizable brand names, makes these QSR properties an attractive investment, particularly for 1031 exchange investors.
Personal luxury goods—the “core of the core” of luxury—continue to buoy the market, according to global consulting firm Bain & Co. Yet that growth is slowing: in 2013, luxury goods grew 7 percent, and in 2014, growth slowed to 5 percent at constant exchange rates.
Coastal markets continued to attract the most retail property investors during the first half of this year, according to recent data from Real Capital Analytics (RCA). Seven of the 10 most active investment sales markets were coastal, with Chicago, Dallas, and Houston the exceptions.
Americans just can’t get enough coffee, and that’s good news for coffee chains. Both domestic and international brands are opening new stores across the country, providing a plethora of choices for even the pickiest of coffee drinkers.
After gobbling up one of its biggest competitors earlier this year, Albertsons Companies Inc. is now pursuing an IPO. The Boise, Idaho-based company filed a registration statement with the Securities and Exchange Commission to sell shares of its common stock.
Demand for newly-constructed net lease assets is fierce, and these assets are commanding a pricing premium in the net lease space due to their scarcity. However, as retailers execute their expansion plans, experts anticipate more new retail net lease properties to become available.
After a tsunami of store closing announcements during the first half of the year, experts forecast that the remainder of 2015 will be relatively quiet as retailers focus on getting through the holiday season. However, retailers will continue to shutter stores throughout the year as leases expire.
Foreign investment in U.S. properties is accelerating, and despite the complexities and challenges of owning retail real estate, international money is eyeing this sector. But these investors aren’t making the leap into retail real estate alone; most are partnering with U.S. firms.