"If the stock market takes off, you might find a lot of wealth in real estate go back into the market," said Thomas Caputo, EVP of New Hyde Park, NY-based strip center-owner Kimco Realty Corp. "There's plenty of opportunities for potholes out there."
But all of the speakers agreed that times are good now. "I've been brokering for 24 years, and I've never seen so much capital in the marketplace," said Bernard Haddigan, managing director of Marcus & Millichap in Atlanta.
Attendees got to hear the largest retailer in the world's plans for 300 new US stores next year from Tony Fuller, VP of Wal-Mart Realty Corp. About 70% of those units will be the company's 200,000-sf Supercenters, which add groceries to the discount store format. (The company operates nearly 3,000 US Wal-Mart stores.) Fuller also spoke about the retailer testing 90,000-sf prototype Supercenters so it can expand into urban areas, a place where the company has not normally gone.
Supercenters were also brought up when panel members discussed the future of supermarket chains. When a Supercenter opens in a town, Caputo said, the number three and four grocery chains by market-share will usually close. "You will go from meager profits to negative profits, and probably after a year they're there, you're gone," he said. Kathleen Nelson, managing director of TIAA-CREF's mortgage and finance division, feared that number two grocers might get shut out. "We see this as one of the most serious issues in retailing today," she says.
Fuller acknowledged that his company's Supercenters will put weaker chains out of business, but it "accelerates" those stores' "inevitable" fates. But other chains can compete, he says. "There are many good operators that have a niche in the market that meets customers' demands better than we will, and we know that," Fuller said. Panelists named Publix and Wegman's as examples in the industry of formidable regional alternatives to the retail giant.
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