Annual Retail Review
Confidence
Consumer
and
the
By Natalie Dolce
Younan Properties Inc. is known for its invest- ments in office properties, but it’s no stranger to retail
product. In April, chairman and
CEO Zaya Younan expanded the
company’s footprint in that arena
as it re-entered the Phoenix market
through the all-cash purchase of a
137,552-square-foot foreclosed retail
center, Scottsdale Promenade.
The appeal of the center, Younan
told Real Estate Forum sister publication GlobeSt.com, was that it occupies a
great location in a fast-changing and
improving market. Furthermore, with a
65% occupancy, the property offered plenty
of upside potential and wouldn’t require
much work or repositioning other than deferred maintenance.
Overall, Younan is convinced that now is a good time to buy
retail. In addition to Phoenix, the firm is eyeing potential properties in Dallas and Houston, as well as other areas, and hopes to
reveal more transactions in the coming year. “There’s a lot of
opportunity out there now that may not be available two years
down the road. It’s a great time to build out a portfolio,” he says.
Companies like Younan are not only betting that now is a great
time to invest in retail, they’re also betting on the consumer. And
according to a ChainLinks Retail Advisors’ US National Retail
Report, although the market is dealing with a host of issues—includ-
ing ele-
vated unem-
ployment, weak
job growth, inflated
sovereign debt and
continued policy uncer-
tainty—many of the retailers
who occupy centers like the one
bought by Younan are betting on consumer confidence as well.
The confidence that retailers have in consumer spending is
reflected in their expansion plans. Restaurant concepts alone cur-
rently account for 42% of all the planned growth (in unit counts)
that ChainLinks is tracking in the marketplace today. Among the
leaders in this category are Subway, which wants to roll out about
2,500 units in 2013, and Five Guys Burgers and Fries, which hopes to
open as many as 500 new stores in 2013, says the firm. “Dollar stores
also continue to aggressively grow and are single-handedly changing
the net lease investment market, which has traditionally been domi-
nated by drugstore, fast-food and automotive retail concepts.”
But according to ChainLinks—and to the retail specialists we
interviewed—many challenges remain for the retail market. In the
view of ChainLinks, the slightly improved consumer confidence
and modest improvements in job growth, when compared to last
