but a lot of these folks have more of a challenge in meeting their
growth demand. Finding new locations, as Paul said, is difficult
if they’re sitting around waiting on new shopping centers. In the
meantime, we’re all trying to find the right site and the right cotenancy and waiting for the anchor to make the decision.
On the flip side, we’re seeing what, in the past, would have
been more typical shopping center tenants now willing to do a
freestanding transaction in high-density locations. But as a whole,
we don’t see the growth of the number of centers that everybody
experienced in 2005 and 2006. What we do see is the difficulty of
finding the right sites in high-density locations, which drives up
the entry price in the transaction. But when you can find those
locations, then you’ve got an audience of interested retailers.
MILLER: I don’t think you’ll see significant change in our busi-
Marcus & Millichap Real Estate
ness. Obviously, we’ll continue to try to figure out
what the retail store of next year will be, or in 2015.
We continue to look at unique ways in which we
can differentiate ourselves from the competitors,
but it’s going to come down to the services that you
can offer. People are looking for ways to improve
their health and reduce healthcare costs. Helping
consumers do that will be our goal.
BRANDT: The business side of the economy is
really strong, but we are not, as a bank, really
looking for a strong recovery in the cash flows
coming out of the retail sector. However, the
perception of value is going to increase if we
continue to see this recovery move in a positive
direction. If you look at any CMBS pool issued
this year, the largest component is retail.
ROSE: From a development standpoint, the traditional suburban expansion may be on hold for
a while, given the capital market’s disinterest in
financing new spec projects, along with the psychographic trend of new urbanism. With the rising
cost of gas prices, long commute times and empty
nesters choosing to downsize from single-family
homes and leave the suburbs, people are migrating back to the urban core. There has also been a
lot of employment growth in the cities. All of these
things are prompting this new urbanism trend.
In response, we’ve seen several big-box chains
altering their footprints in store layouts to accommodate urban infill sites in places like San
Francisco, Chicago and New York. We’ve got a
lot of people chasing that 15,000-foot footprint—
that one-stop shop in dense urban environments.
With the dollar stores adding grocery and discounters adding pharmacies—pardon the pun,
the traditional grocers are going to need to stay
fresh. They need to start re-inventing themselves,
because I haven’t seen anything new coming out
of the traditional grocers.
There’s a symbiotic relationship between debt
and equity. As long as we have a favorable interest-rate environment, we’re going to continue to have
not only a motivated investor pool out there, but
also other global investors seeking the safety of the
US Treasury. Easily, in the next 12 to 18 months
we’ll continue on in a favorable trend. ◆