By: Chris Hollenbeck, Senior Director of Retail Services
What happens in Vegas, stays in Vegas? Well not this year! ICSC RECon 2017, hosted by the International Council of Shopping Centers, pulled out the red carpet on the Las Vegas strip for over 37,000 retail real estate professionals and 1,200 exhibitors to provide networking, deal making and educational opportunities.
In typical real estate fashion, the conference moved quickly and was extremely busy. The atmosphere was cautiously optimistic looking into 2017 and 2018. While there are a number of thriving sectors in retail such as fitness, food, entertainment and discount apparel concepts, there are some big box retailers that are still struggling to keep up with the ever changing online customer.
This year there were some key takeaways from the annual conference, in between the deal making and drinks, which coincide with my outlook for the 2017 retail market:
- Retail isn’t dead, it’s just going through an evolution. People are starting to shop differently through more sources than just online or in store. As a result, retailers are using a combination of these outlets to attract customers and get more business.
- Big box retail closures are going to continue to hurt larger malls and shopping centers. Malls are going to have to reinvent themselves with more lifestyle and entertainment tenants, instead of the standard retailers. Rather than just shop, malls will soon become a place to eat and be entertained.
- Technology and social media are going to help power consumer behavior and shopping patterns. Technology, if used correctly, will be the biggest help for brick-and-mortar retailers to draw in shoppers.
In addition, the investment side was a hot topic of discussion. It was touched upon that we will be seeing a slight uptick in cap rates over the coming months, especially as interest rates continue to rise. There is a big discrepancy between Class A, B and C product as it comes to what investors are seeking. Investors are looking for the Class A product and will pay for it, but at the same time they are looking for steep discounts on more risky Class B and C products.
Overall, the retail outlook seems to be a bit of a gamble with the number of notable shifts taking place but if you can keep up with the retail progression you’ll hit the jackpot!
Chris Hollenbeck is a Senior Director at Cushman & Wakefield. After graduating in 2006, he moved to Phoenix where he started his career in commercial real estate at Sandor Development. In 2007 he moved over to Grubb and Ellis|BRE Commercial, now Cushman & Wakefield. He has been in the commercial real estate field for 11 years now, 10 of which has been at the same company. Chris’ focus is on retail brokerage. He has excelled in the leasing of retail shopping centers over the years and recently transitioned into selling retail shopping centers. He represents a wide variety of cooperate clients throughout Arizona, as well as nationally. Chris has been recognized with the National Tomorrow’s Retail Leader Award for rising stars and was also the top retail producer for 2016 at his company and is consistently in the top 20.