CALABASAS, CA-“As tenant demand increases for well-located junior box space, landlords will not be as motivated to keep a struggling tenant or offer concessions.” So says Alvin Mansour, senior vice president of investments and senior director of the national retail group and net leased properties group at Marcus & Millichap Real Estate Investment Services, who recently chatted with GlobeSt.com west coast editor, Natalie Dolce on where retail is headed, who the players are, and where the opportunity lies. Mansour was recently named one of the firm's top investment specialists of Marcus & Millichap nationwide.

GlobeSt.com: In the spring of 2009, the retail sector was in the center of a perfect storm caused by a number of factors including the housing crash, overbuilding and frozen credit markets, not to mention massive job loss and a lack of consumer confidence. Where do things stand today and where are they headed? How is inventory?

Mansour: The retail market has been slowly rising over the past couple years and is in full force for 2013. With the lack of development post-recession, we have seen the market catch up with good absorption and tenant expansion requiring new retail. Although much more conservative, our developers pipelines are slowly growing and we are seeing some tenants ramp up expansions.

With the lack of inventory for sale, the record low 10-year treasury, and the deficiency of better investment choices, we expect 2013 to finish very strong. Since financing is currently available at such low rates, traditional investments such as CD's, mutual funds and others do not offer the rate of return that they used to.

GlobeSt.com: What is the single biggest factor impacting the retail business right now?

Mansour: E-Commerce is one of the biggest factors impacting the retail business. Its reach can be seen with big box anchor tenants attributing high percentages of their revenue to online sales and forcing them to rethink their company mentality. Increases in these areas impact what locations they keep open and/or downsize.

GlobeSt.com: Due to e-commerce, are you seeing that any retail design is changing as a result of that, to maybe highlight items that can be purchased online vs. in-store? Is the use of store displays changing to reflect this?

Mansour: The retail market is extremely competitive and ever changing. Retailers are adapting the products that they offer and taking advantage of the real time data that they receive from their online stores. They have to keep up with the pace of the digital era so they have no choice but to stay relevant. They are being more selective with the items that they highlight in their stores and are changing the design to make it easier to find product. There has been a definite shift with some companies offering more options to their clients online.

GlobeSt.com: What buyers are out there? Private? REITs? Foreign money? Who are the players?

Mansour: We have seen a large increase in private buyers exiting the stock and bond markets that are targeting retail opportunities. Many private buyers are also shifting away from management intensive investments like apartments and moving towards passive single tenant investments.

Foreign buyers have also come into play considering the instability in the global markets, we have recently sold some shopping centers, single tenant retail and office buildings to oversees buyers. We have also seen an uptick in interest from Latin American buyers targeting the US for real estate investment.

Most of the major players in the current marketplace have been large REIT's, Pension Funds, Institutions and private funds. Although the majority of transactions under $20 million are dominated by the private buyer with the highest percentage being based in California. We have successfully transacted with several unique buyer pools including, Doctors, Lawyers, Agricultural Farmers, Sports Athletes, and high profile entertainment industry individuals.

GlobeSt.com-With every challenge there's usually an equal or larger opportunity. Where do you see the opportunity in the retail business?

Mansour: We see great opportunity investing in secondary/tertiary markets. There is opportunity to purchase quality credit anchored well located dominant centers at spreads 200bps higher than major markets. With rates where they are, this allows investors to achieve a strong double digit cash on cash return. We are seeing CMBS lenders enter this market more aggressively due to the lack of major market deals. They have no choice so expect to see great opportunity in this area.

GlobeSt.com: On another note, are you seeing many landlords renegotiating deals with tenants to keep them in place or has that slowed down at all?

Mansour: The pace of renegotiations has slowed down drastically from years past. We're still seeing landlords renegotiating leases with junior box tenants who have been struggling throughout the recession and looking to reduce square footage. In many cases this has been mutually beneficial for both the tenant and the landlord. However, as tenant demand increases for well-located junior box space, landlords will not be as motivated to keep a struggling tenant or offer concessions.

GlobeSt.com: Is there any overbuilding happening or is that no longer a concern?

Mansour: Overbuilding has not been a concern in retail due to the lack of development we have seen over the past couple years. Although absorption has picked overall in the last two quarters, employment growth has not reached the level most retailers need to get back into expansion mode on a large scale. There exceptions but overall we aren't concerned about over building at this point in the cycle. From a brokerage stand point, we are seeing a continued supply issue and need more product to deliver with the amount of liquidity looking for deals.

GlobeSt.com: How are retailers doing in Southern California and what is your perspective on SoCal's viability relative to the rest of the country?

Mansour: Southern California remains a stand out market along with other major metropolitan areas. It remains a source of investment capital with the ever changing market. Retail remains strong and the constant redevelopment to keep up with the completive market is intact.