GlobeSt.com: At the ICSC RECon show in May, you mentioned to GlobeSt TV the concept of the convenience center versus the convenience store and how that appeals to many different service sectors. I am curious—where are you seeing most of those opportunities geographically? Is Passco Cos. targeting acquisitions in only primary markets, or are you considering secondary and tertiary markets as well?

Passo: The benefit of investing in convenience shopping centers is that there is not really a “primary” market for these products. While most investors view primary markets as the major MSAs, convenience shopping centers are located in more suburban settings. The success of these centers is based on their proximity to housing, as well as the demographics surrounding each center. With that fact in mind, we can focus on markets throughout the US, and base our investment decisions on the strength of each property on its own. This gives us the flexibility we need to acquire strong centers throughout the nation.

GlobeSt.com: Are you confident about the consumer?

Passo: To be frank, I'm not confident about the consumer, but I'm very confident about retail. We all know that unemployment is trending down, but the reality is that the majority of the new jobs being created are minimum wage positions which are not likely to stimulate the retail market as a whole. That said, a retail investor can circumvent those issues by investing wisely, which is the strategy I believe we are employing at Passco. Rather than acquiring assets with an “anything and everything cheap” philosophy, we are making conscious choices about which types of retail we believe will be successful. By focusing on smaller, regional shopping centers with service-industry tenants, we are ensuring that our investments will continue to draw consumers, who are consistently in need of these services.

GlobeSt.com: Have you identified any new trends emerging in the retail industry? Where do you see retail heading over the next year, five years, and 10 years?

Passo: I believe that retail will continue to improve and reinvent itself over the next 10 years, presenting new opportunities for smart investors. At the moment, the most major trend in retail is occurring at the shopping center level. We are seeing a strong shift toward entertainment-oriented centers, and a reduction in tenants offering soft goods. This is most certainly a result of strong competition from the internet, where shoppers can easily purchase consumer and fashion goods with a click. On the other hand, consumers are constantly seeking new places where they can spend leisure time, and malls and shopping centers throughout the nation are responding with an influx of entertainment retailers. Coinciding with this trend is an increase in high-end food service tenants, which is steadily replacing the traditional food court concept in regional malls and shopping centers. These changes are likely to continue, especially as online shopping continues to have a growing impact on the future of retail.