Deal Flow and Activity Continue to Pick Up Between Retailers and Landlords, Despite Macroeconomic Concerns.
Perhaps affected by the fabulous San Diego weather, the mood was sanguine among the nearly 4,000 attendees at the ICSC Western Division Conference last week, especially compared to the last two or three ICSC events in America’s Finest City.
CoStar was at the conference in force at the San Diego Convention Center, where hundreds of brokers, investors, retailers and vendors from all over the country gather every year to make deals and gauge the market.
Strolling on the massive trade show floor and loaded with Nerf footballs, key chains, branded flash drives and other conference swag, some conference goers seemed even willing to shrug off the concerns of the presidential election, the fiscal cliff -- which has shaped up as one of the main political-economic debates of second-half 2012 -- and the economic crisis in Europe.
Conference attendance, while still below the days when ICSC memberships were swollen with an army of financial firms such as Lehman Bros. and other victims of the financial collapse five years ago, was about 5.1% higher than last year at just under 4,000. Among the reasons -- the improving market, and loosening travel budget, for retailers, their real estate landlords and the hundreds of vendors that support them, according to Jermaine Hyman, an ICSC membership services coordinator.
But property owners and developers are seeing a definite uptick in interest in retail space
, though it may takes weeks or months for actual deals to come to fruition.
"We see a lot of interest in our projects," said Neil Soskin, a broker with Primestor Development, a retail developer specializing in urban markets and the Hispanic community in South and South-Central Los Angeles. "People are more cautious about making commitments than they were six or seven years ago. But there is a demand for growth by most of the national retailers.
"It’s all relative. People here are more upbeat than last year, which was more upbeat than the year before. But it’s still wrapped in a bit of caution. We want to do deals but we also want to minimize our risk."
"Activity level and attendance is about the same as last year, which are both better than previous years," said Bryan Cunningham, vice president of retail brokerage with Jones Lang LaSalle in San Diego. "The energy is great; the deal flow is increasing on an asset by asset basis. The regional and strong neighborhood centers seem to be getting all the traffic. There are some tenants that were dormant that are beginning to become active again, and that's encouraging to see."
"Retailers seemed generally more optimistic about where they are and where they are going, but unemployment is a major concern and the election is weighing on everyone a little bit," Cunningham said.
"People's schedules seem more booked and they're having more meeting than in previous years, added Christina Briggs, economic development for the city of Fremont, CA, near the Silicon Valley. "Whether that's resulting in more deals, I don't know."
Do people seem more upbeat about the ability to complete transactions?
"They do, but I think deals take longer and it is more of a process," Briggs said.
The three-day conference concluded Friday.