Retail market outlook: Increase in sales

Happy New Year!  While we wait for the official Fourth Quarter 2012 results to be compiled, I can attest to (and almost guarantee) that sales activity in the retail shopping centers sector flourished as sellers rushed to complete sales by the year’s end. Special servicers, lenders and distressed property owners were the primary sellers; users and opportunistic buyers were the primary buyers.  Annual figures are expected to show an overall increase of total sales in terms of dollar volume compared to 2012.

Distressed retail assets sold not on cash flow, but the demographic markets price per square foot comparables. Traditional sales (that of non-distressed properties) were primarily Class A anchored assets. These properties traded almost exclusively among the private and publicly traded REITS. Lack of inventory of stable retail centers in core markets demanded cap-rates not seen since 2005.

The expectation for 2013 is more of the same, as billions of dollars in loans become due and property owners find themselves unable to replace existing debt because of shrinking property values resulting from reduced rents and/or loss of tenants. In addition, the economic and governmental debt crisis uncertainty will play havoc on tenant expansion, job growth and lender motivation.  These conditions will once again drive sales as investors look to commercial real estate for yield and the belief that real estate values have reached bottom.


Shari Tucker-Gasser, National Director of Retail, Sperry Van Ness
Shari Tucker-Gasser, National Director of Retail, Sperry Van Ness

Shari A. Tucker-Gasser
National Director of Retail

Sperry Van Ness/dba Sperry Van Ness, LLC




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