This weekend marks the start of the retail real estate sector’s premier event: the International Council of Shopping Centers’ (ICSC) annual RECon trade show and conference in Las Vegas. Lots of our attorneys will be traveling to the show, and we’re especially looking forward to our party this Sunday night, May 20, at the House of Blues at the Mandalay Bay Hotel. Keep your eyes peeled for party photos and coverage of the show in the days ahead.
Before he headed out West, we got a chance to talk with our own Peter Hartman, who has worked in retail real estate for years and represents shopping center developers and both tenants and landlords in leases, to get his expert take on where the sector currently stands.
HS: How would you characterize the performance of the sector so far this year and what does the rest of 2012 hold?
Hartman: Overall, retail real estate is certainly healthier and moving in the right direction. There have been fits and starts but overall the entire sector from our perspective is greatly improved.
HS: How is that improved health reflected in the firm’s retail real estate activity?
Hartman: The amount of leasing activity we’re involved in is 10 times greater than what it was a year ago. Of course, it’s all relative. It’s not close to where it was in 2006 or ’07.
The return of some big retailers like Target to new developments and the growth of discount retailers like Dollar General are two of the trends behind the increased leasing and development activity we’re seeing.
HS: How aggressive are developers in pursuing new projects and what kinds of projects are they most interested in?
Hartman: I would say developers are being selectively aggressive in pursuing new projects. The fact that financing has become somewhat easier to obtain plays a key role in the increased development activity.
They are definitely interested in mixed-use projects. Everybody’s big on having a multifamily component, or at least being near multifamily. One great example of this trend is a project we’re involved with: Avalon, a $600 million, mixed-use project in Alpharetta. We’re representing the developer North American Properties during the development, leasing and construction of the project.
HS: What kind of stores are doing well in today’s market?
Hartman: Discount stores like dollar stores are doing really well. Higher-end, luxury stores like Nordstrom’s are performing well too. It seems to be that mid-level retailers are not doing as well.