Beyond the Traditional Block: 2014 is Shaping up to be a Retail Seller’s Market

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By Brian Rogal, Excerpt from

Strengthening retail market fundamentals and price appreciation are making the investment community bullish on retail sector in 2014. After a strong first quarter this year, the momentum is expected to continue as increased demand for retail assets has created optimal conditions for sellers.

Kris Cooper Video Screenshot

Grocery-anchored, urban high street retail and trophy malls top the list of product prime for the picking as limited supply enters the market.

“While the most desired retail asset types remain high-quality grocery anchored centers and trophy malls, many investors are getting outbid in gateway markets and are turning their attention to all different types of retail assets and markets. We’re seeing an increased number of sales of strip centers and power centers come to market, receiving aggressive bids and trading quickly,” commented Kris Cooper, Managing Director at JLL.

While tightened coastal markets often offer buyers top-notch product, JLL expects longevity and performance in a few key secondary markets given Millennials, the generation between 18 to 34, total 80 million Americans and spend approximately $600 annually. By 2020, they are expected to spend $1.4 trillion, with 30% representing retail sales. As retail follows rooftops, Las Vegas, Orlando, Charlotte, Raleigh and Phoenix top the chart of markets anticipating growth from these already savvy shoppers.

The market as a whole is in a healthier state than at any point since the recession. “National rents are inching up, and most metro areas are back in the black,” added Margaret Caldwell, Managing Director at JLL. Net absorption continues to climb, and landlords are starting to exert some power in tenant selection.

Follow the team on Twitter: Kris Cooper  @cooperkrisj and Margaret Caldwell @MargCaldwell

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