In late May, more than 30,000 retail professionals attended the annual International Council of Shopping Centers (ICSC) convention in Las Vegas. Cushman & Wakefield had a large and visible presence, including all of the Cushman & Wakefield/NorthMarq retail teams. The group joined retailers, brokers, landlords, investors and vendors from around the world to meet and deal.
Mike Ohmes, executive vice president of Cushman & Wakefield /NorthMarq (CW/NM) Transaction & Advisory Services, was delighted to see many of the C&W/NM brokers at the booth working on deals with our C&W counterparts around the country. Jen Helm had some great meetings for international growth with the WichWich sandwich format and is excited to be working with C&W brokers from other countries.
C&W/NM’s Tom Martin noted that forward momentum was very good, with retailers generally positive about their futures. Growth plans are no longer being driven by Wall Street to the degree they once were, so growth is more measured. “Those retailers that were active with new store growth were simply bombarded—if it looks like you might do a deal, everyone wanted to talk with you,” Tom said.
Retailers driving deals
Retailers are still driving deals, and looking for very aggressive terms. There continues to be a strong epidemic of indecision from all sides of a deal. Retailers believe they can and will command below-market rents and extras and will take a lot of time looking for the “right” site that will also give them the deal they believe they can get. Landlords are tired of doing below-market deals and aren’t as quick to sign a lease with a tenant that won’t give them the rent stream they need. So deals continue to take enormous lengths of time to get to the finish line—and the saying “it’s never done until it’s done” is true today more than ever before.
Top-tier deals are still the ones getting done, especially in grocery-anchored retail centers and credit net leased properties, C&W/NM’s John Breitinger noted. John’s overall impressions were that the commercial retail world was getting better at every level, deals are getting done, but the recovery is still very fragile. Most retailers and landlords appear to still be very cautious, working very hard, and looking for that new idea. As John said, “the world as we know it today may be the new normal.”
In-line leasing growth
Some good news is that the string of big-box vacancies appears to be over, with healthy growth for in-line leasing, particularly with dining and entertainment categories. High-end retailers are doing well and actively looking for new locations, and growth is continuing for the value retailers.
While many retailers are looking at redevelopment opportunities around the country, as we see here in Minnesota, Ronn Thomas noticed that many developers are in the planning stages for new projects to start in late 2012 and 2013. Mall growth appears to have stopped around the country, and many believe the number of malls will actually decrease over the next few years. Small-shop space continues to lag in rents since 2008 and is very slow to come back.