The users that can drive development have not been bullish on
getting out in front on the development cycle. They’ve been more
concerned about making sure that their existing space is current and they have taken
advantage of all of the expansion possibilities
where they can improve sales.
ROSE: Deliverables this year are slated at 50
million square feet. This is year five of stagnant development at that rate, compared to
2007‘s height of over 220 million square feet.
It’s great news for rent growth, but is there a
large power center being developed? There’s
a handful, but not what we’ve had in the past,
and that’s good news for the industry. The
growth in mixed-used and urban-infill projects is healthy.
RITTER: How does everyone feel about
the consumer right now? Are you comfortable with the “new normal” of unemployment rates and the different ways
ROSE: The consumer is very comfortable
today. When I walk shopping centers, there’s
strong traffic. When I hear about new store
openings, there are new concepts rolling out.
Is it foolish and are people buying like crazy? I
haven’t seen it yet, but you also see very strong
earnings by Nordstrom, Neiman Marcus and
Saks, showing that luxury-good items are back
PHILLIPS: Customers are a lot smarter than
they’ve ever been. They have access to so much
more information about products—where to
get them, how to get them, how to price
them—so as an owner of shopping centers,
we’re paying a lot of attention to that. We’re
trying to understand from a retailer’s perspective if are they addressing that. We want to
know what they’re doing in the future and how
they’re addressing a consumer who’s much
more sophisticated than 10 or 15 years ago.
SEHGAL: Consumers are staying with the dis-
count mentality. They’re smarter, and
although we’ve seen an improvement in the
economy over the past 18 months, we’re still
seeing strong sales by discount retailers in our
portfolio. Although the average consumer is doing better than just
a few years ago, they’re still looking at every dollar and spending
much more wisely, remembering what happened before.
FRUMKIN: Since day one at Sprouts, we have been keenly
focused on offering value and we remain heavily promotional.
This strategy was consistent during the recession and remains so
today. We sell produce for 25-30% below the conventional supermarkets on average, and this attracts both the natural lifestyle
customer and the everyday grocery shopper. This is an important
element of our success because it allows us to take market share
from both our natural foods and supermarket competitors. ◆
“If the assets have a
good tenant mix, location
and a strong borrower,
we will find a way to
make the deal happen.”
Reprint orders: www.remreprints.com
As the third largest publicly traded single tenant
triple net lease REIT, Spirit Realty Capital is
actively acquiring leased and sale-leaseback
transactions on a broad spectrum of diversified
asset classes – representing growth, stability
and opportunity for our clients.
April Ronchetti Little