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Retail Remains Popular Investment Vehicle

In this EXCLUSIVE article, one source expects a small expansion of cap rates in more suburban and tertiary markets but given the starvation for yield mostly status quo in cap rates for urban retail.

By Natalie Dolce | nataliedolce | | Updated on June 13, 2016
Eli Randel, director of business development at CREXi. Eli Randel, director of business development at CREXi.
Retail will remain an extremely popular investment vehicle among the other food groups given more passive ownership structure, low barrier to entry for ownership, intuitive nature, operating expense reimbursement structures, and predictive yields (assuming tenants are properly underwritten). Those thoughts are according to Eli Randel , director of business development at CREXi , who recently chatted with GlobeSt.com about his thoughts on all things retail . As GlobeSt.com previously reported , Randel heads the new CREXi Miami office for the firm. “Assuming interest rates remain low—which they will—and in some nations negative, non-real estate investors starving for yield will continue to gravitate towards retail ownership as something they can drive by, kick, and find income in,” he tells GlobeSt.com. “Bond-like net lease investments are attractive to the many disillusioned with Wall Street investment vehicles and seeking ownership of a hard asset they can see.” Lenders, he adds, continue to get aggressive on good retail in good markets and access to capital (both equity and debt), though becoming harder, still readily exists for good sponsors. “We expect a small expansion of cap rates in more suburban and tertiary markets but given the starvation for yield mostly status quo in cap rates for urban retail.” Randel adds that “Foreign capital starving for yield and recognizing that amidst all of our dysfunction, evidenced by this election season, the US is still a safe haven for capital and foreign investors will continue to pursue US real estate investments contributing to continued cap rate compression for quality real estate, with quality tenants, in quality locations.”

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