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Retail Remains a Desirable Product Type

SAN DIEGO—In preparation for the upcoming ICSC Western conference next week, GlobeSt.com caught up with CBRE first VP, Arthur Flores, on retail investments.

By Natalie Dolce | nataliedolce | | Updated on August 25, 2016
CBRE first VP, Arthur Flores CBRE first VP, Arthur Flores
SAN DIEGO—Retail will remain a desirable product type for investors to buy and sell in Southern California. That is according to CBRE first VP, Arthur Flores , who recently caught up with GlobeSt.com in preparation for the upcoming ICSC Western conference next week. “Capitalization rates for retail product are among record lows, making this a desirable time to dispose of an asset,” he says. “But, still at a minimum of three times better than the 10-year U.S. Treasury Yield for even the best priced ‘core’ assets, retail in this region also  remains an attractive investment.” Combine that, he adds, with the scarcity of retail product available in the market, and “we are likely to keep seeing downward pressure on cap rates and upward pressure on pricing.” Flores tells GlobeSt.com that “The market has been extremely binary with the majority of investors seeking ‘best or distressed’ retail assets, with both categories achieving record prices in today’s current market. And despite some recent shifts in the CMBS market with Regulations AB earlier in 2016, the CMBS market seems to have stabilized. This has positively impacted B and C assets in Southern California with rates ranging from the low- to mid-4% range for better-type properties.” Keep checking back with GlobeSt.com in the next week for all things retail.

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