Ian Ritter is national online editor for GlobeSt.com/RETAIL.
LAS VEGAS-Some lenders are concerned about the overbuilding of certain types of projects in the retail real estate industry, according to speakers during a session today at the International Council of Shopping Centers' Spring Convention. The panel discussion, called "Is Retail Still the Darling of the Industry?" took place at the Las Vegas Hilton.
Timothy Leaycraft, a managing director at TIAA-CREFF, said that he fears that too many lifestyle centers are being built across the country. "It seems to be a very hot sector, and I think that there are projects being built that shouldn't be built," he said.
Louis Grabowski, a partner and EVP at Atlanta-based Ben Carter Properties, said the biggest challenge his firm faces is a crowded development environment. "Our challenge is that there are a lot of folks out there doing what we do," he said. One way that Ben Carter has tried to differentiate itself from other developers is by concentrating on secondary markets, Grabowski said.
The grocery sector also faces challenges, he said, because of competition from expanding discounters that sell food. "Anybody trying to go up against Target or Wal-Mart is going to lose," he said. But there are chains out there, like Whole Foods, that are able to succeed in the sector by offering items that consumers can't find at the discount giants' stores.
Despite a note of caution, the panelists were generally upbeat about the industry and most said they were not overly intimidated by rising interest rates and other factors because the demand for new retail stores and services does not seem to be diminishing. "Retailers are doing a great job rolling out new concepts," Leaycraft said
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