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It has been widely discussed that many big box retailers are making the move from suburban sprawl to the heart of urban centers. This trend had been triggered by a number of factors including strengthened urban demographics, inherent land value and stable demand for staple products - which big box retailers are increasingly featuring. Though it may seem like a tight fit, big box retailers are showing a willingness to adapt and reconfigure in order to enter the urban market.
Without question, key urban markets such as Washington DC, New York, Chicago, Boston and Miami consistently outperform the secondary and tertiary markets. This trend has only been exacerbated by the recession and resulting economic turmoil. Prime urban locations have the advantage of strong inherent value in their real estate, increased foot traffic and an easier tenant replacement process. Furthermore, issues such as commute time and city gentrification are attracting an affluent – often young – demographic to these areas. As a result, cap rates in prime urban locations have markedly declined in the past 3-4 years.
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Jonathan Hipp
Jonathan Hipp began his career in real estate over 25 years ago. In his early years as a broker, he ventured into the net lease industry and quickly began leading the US net lease market, closing over $3 billion in transactions. In 2005, Jon founded Calkain Companies, a company focused solely on net lease investment services. As President and CEO, he has been instrumental in building the firm into one of the leading Net Lease real estate companies, transacting over $12 billion of net lease deal volume over the past 13 years. He has expanded Calkain’s services to include brokerage, advisory, asset management, capital markets, and industry research. He has become a well-known resource, panelist, and speaker at various Net Lease and Industry conferences and is a regular contributor to GlobeSt.com on real estate trends. In June 2015, Jon’s passion for the real estate business was again recognized as he was nominated for the Top Real Estate Player in the DC area by SmartCEO magazine.
