Cautious optimism is the predominant mood at the 2012 ICSC RECon, underway at the Las Vegas Convention Center.

“Retail is back. … Development is back,” says Daniel Mullinger, executive vice president and regional executive, PNC Real Estate. He says PNC’s transaction volume is ahead of its pace of last year and lenders that were on the sidelines over the last few years are back in the market, creating stronger competition. However, he adds, “Developers are more tentative. They’re 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. That’s higher levels than [in] 2006 and 2007.”

“The picture has been a little challenging because of the [on-hold] development pipelines since 2008, 2009, 2010,” says Daniel Herrold, the Tulsa, Ala.-based executive managing director of Stan Johnson Company, a national net-lease firm. “But now in 2012, we’re hearing more about expansion than ever before, and we’re in a lag now waiting for new development growth.”

Stan Johnson Company is “actively in growth mode,” says Herrold, with plans to enter the South Florida and Washington, D.C. markets, having opened an office in New York in late 2011. The firm also has offices in Houston, Chicago, Los Angeles, San Francisco, Phoenix, Atlanta and Tulsa, Okla., and is in the process of hiring for the first time since 2008. “The net-lease market is very hot today and we want to take advantage of that ramp-up, and that means going out and finding more brokers,” he says.

At CBRE Capital Markets Luncheon, held in conjunction with RECon, the more than 350 industry professionals in attendance registered a “glass half full mood” through an audience response system, noted moderator Spencer Levy, the Baltimore-based executive managing director for the firm’s capital markets. “There’s no euphoria, but at the same time it’s not the opposite either.”

Fifty-eight percent of the luncheon guests agreed with the statement that “Things are better than last year, but not great,” while 32 percent agreed that “Things are better than last year, but we’re out of the woods.” Three percent said, “It’s not dark yet but we’re getting there,” while 7 percent said, “We’re crushing it; life is fantastic.”

The winners in retail, according to CBRE Capital Markets Luncheon panelist Anthony Buono, CBRE’s San Diego-based executive managing director for retail services, include Kroger and Publix for groceries; drug chain stores like CVS for health and beauty, which are catering to baby boomers by providing more onsite services like massages and age group-targeted products, including vitamins; Forever 21, H&M and Uniqlo for fast-fashion women’s clothing; TJ Maxx, Marshalls and Ross for discount stores; Chick-fil-A for quick-service restaurants and Dick’s Sporting Goods for athletic goods.

Buono said he believes that the electronics big box stores have been severely challenged by online competition, and that while shoppers will continue to purchase their durable goods (such as washers, dryers, dishwashers and refrigerators) in stores, they will solely purchase electronic equipment online, with the exception of Apple merchandise.

“Apple could cross every generation,” Buono said. Even if the prices for Apple goods were 5 percent lower online than in Apple stores, he said he believes people would continue to buy Apple products in the store. “That’s because Apple is not a computer store—it’s a culture store,” Buono said.

Gary E. Mozer, managing director/principal of real estate investment banking firm George Smith Partners, in Los Angeles, says he sees “the world as a spectrum running between greed and fear—and then we extended that out to panic.”

Now, he says, the retail real estate market is “out of fear but not quite to greed,” and he sees the entire industry—tenants, bakers and lenders—as cautious. “That’s because there’s life back again, but there’s a ton of competition and that’s driven down the spread. …We’re seeing the capital markets drive a lot of transactions and we’re finally seeing leasing but still, it’s a tenant’s market.”

While top properties in dense urban markets are still going to lease, Mozer says secondary markets are “all about the basis points…there’s not a lot of net absorption but there is a lot of downward pressure on rents.”

Although when it comes to looking at what’s down the road for retail, Mozer says his “crystal ball is opaque due to so much stuff being out of control” in the global market, his own firm is on the upswing. George Smith Partners’ deal volume is already up 30 percent from 2011, he says, and he expects to top last year’s total transactions by July. In 2008, the firm went from 75 to 22 employees, but has now risen to 42. Meanwhile, says Mozer, the firm’s overhead is down 65 percent, in part because it is making denser use of less space. “One trend to look at in both the retail and office markets is doing more with less space,” he says.