When it comes to office buildings, investors typically look for core properties in top tier cities. At least that was the case in the early days of the recovery. Now, investors are starting to move beyond the metros to do smaller deals with strong upsides in second-tier cities.
Although investors still prefer core properties, there are fewer on the sales block these days—and there is plenty of money from investors in every category chasing the deals.
So what can we expect in the second half of 2011 on the retail front?
Demand for grocery-anchored centers and triple net lease properties will heat up—even in smaller markets. Joint ventures could emerge to leverage new opportunities for class A properties in smaller, recovering markets.
We’ve already seen Equity One hook up with New York Common Retirement Fund. And who could ignore CBL Associates Properties’ whopping $1 billion joint venture with TIAA-CREF to invest in market dominant shopping malls.
How about new retail construction. Yes, we can expect more of that in underserved areas—South Florida being one of them. We’ve already seen Publix break ground at the Kendall Shopping Center. A Publix and a Whole Foods are planned for Downtown Miami.
Finally, expect to see mixed-use retail projects gain momentum as the market continues its recovery. A good example in South Florida is One Park Square in Doral. The mixed-use office building is seeing retail space fill up fast. And the Hampton Inn planned for Downtown Miami also incorporates retail on the ground floor. This is the wave of the present.
What about you? What do you expect to see on the retail front in the Southeast? More trades, more development, more activity in non-core markets? Or are we in for a double-dip because we’re moving too fast?
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