LOS ANGELES—Grocery-anchored retail centers dominate in both urban and suburban markets, according to Scott Burns, EVP and a retail brokerage lead for the L.A. market at JLL and the former president of Wilson Retail Group, which JLL recently acquired. The retail market is experiencing strong demand and great market fundamentals, but the robust market also means high investor competition and compressing cap rates. To find out what is happening in the local L.A. market, we sat down with Burns for an exclusive interview. Here, he tells us how L.A. compares to other markets in the nation, how investors are still finding good yields and what characteristics investors should be looking for in a property.

GlobeSt.com: How does the L.A. retail market compare to other markets in the region and nationally?  

Scott Burns: Los Angeles' retail market is one of the largest and most diverse in the nation. In terms of incomes, demographics and retail shopping center environments, it has a something for everyone. The climate, desirability of the lifestyle and range of the employment opportunities (especially now that it is such a tech hub), continues to increase the demand for housing and is fueling the gentrification of various parts of the region. Because of these factors, many parts of the Los Angeles market are seeing all time highs in rents and investment sales pricing for retail properties.

GlobeSt.com: Last year, we talked about the lack of development in the retail sector. Has development picked up at all?

Burns: In urban Los Angeles the large majority of new development is residential or mixed use which is being driven in most cases by favorable zoning, a continued demand for "for-rent housing" and land prices influenced by the first two.  In suburban Los Angeles steadily rising land values influenced by sellers expectations often influenced by residential demand in the urban cores have made new retail development difficult to make sense financially. I would expect to see retail development increase as residential demand slows and or when more retailers are competing for opportunities.

GlobeSt.com: What retail property types are most popular for investors, and what property characteristics are investors looking for in acquisition opportunities? 

Burns: The most popular retail properties continue to be the core grocery-anchored centers in healthy urban and suburban markets.  Due to the lack of available core quality product on the market, competition for this asset class is high and cap rates are near all-time lows.   The urban movement and high demand for quality residential is fueling investor and developer interest in specific pockets of the city.  Areas such as Echo Park, Culver City, Eagle Rock, Venice and various parts of Downtown Los Angeles are appealing to investors since many of these areas are believed to be in the early stages of gentrification/urbanization.

GlobeSt.com: As the retail market improves, how are investors continuing to find good yields?   

Burns: In order to find good deals in this market, investors are taking on greater risks. Whether it's in transitioning trade areas or closing on un-entitled projects, investors have to be creative, otherwise they will end up being the runner-up.

GlobeSt.com: What makes a good tenant mix, and what types of tenants help to drive consumer traffic? 

Burns: A good tenant mix is one that draws a great number of reoccurring customer visits and provides a wide range of offerings.  Daily needs tenants are the mainstay in generating traffic, but in today's environment, discount stores, high volume apparel stores and sometimes the right trendy restaurant can become the anchor of a successful tenant mix.