Tim Kuruzar
There are still plenty of opportunities in the Southern California retail market, and JLL is expanding its retail investment sales team as a result. In its second strategic hire this year, JLL has added Tim Kuruzar to the team as VP. Kuruzar says that the market is slightly past the peak, but there are still ample investment opportunities. Next year, he expects expiring debt to drive more investment activity throughout the region.
“The Southern California retail investment market is still extremely desirable,” Tim Kuruzar, VP at JLL, tells GlobeSt.com. “Most of us believe we're slightly beyond the market peak, but I don't think that is bad news for our clients as fundamentals are still very strong. Cap Rates are lagging behind interest rates, though they are starting to catch up. I also believe that expiring debt is going to be a big market driver in the next couple of years. The changes that stand out the most to me are the extraordinary focus placed on experiential and entertainment driven retail locations and the rise of the junior box. Also, the amount of expanding specialty grocers alone has tripled in the last few years.”
This cycle, as a result of ecommerce growth, there has been a trend toward daily needs and grocery-anchored retail. Kuruzar says that investors still find comfort in daily needs retail, and investment capital continues to gravitate toward those opportunities. “There is definitely a comfort level associated with daily needs retail, and yes, that sentiment holds true today,” he says. “As a consumer, I try and monitor my own shopping habits and the habits of those close to me. What I find is that while we all have more items delivered, there is still a need and desire to feel and touch certain products, fruits and vegetables for example. Daily needs centers will continue to be a focal point of communities, though in the future I see them striking a balance between the daily consumer offerings and logistics. Prime Urban properties on popular pedestrian corridors are also in high demand, many of which have a mixed-use component.”
Repurpose and re-use investments are also creating opportunities in retail. Outdated or underused retail product is being picked off for conversion to other product types. “Now more than any time in my career, there is more crossover in regards to investment product,” explains Kuruzar. “For example, retail is becoming office, industrial is becoming retail and office, and on down the line. This phenomenon creates different opportunities and allows for more creativity from investors when repurposing outdated buildings and concepts. At JLL, we track key statistics and data points that in turn arm our clients with useful information about occupiers and consumers and their national and local activity. Great opportunities exist, but it is more important now to dig deep and really explore the possibilities, wherever they may lead.”
In January of this year, JLL added Tom Lagos and Patrick Toomey as EVPs and Jordan Uttal and Heather Boren as VPs to the retail investment sales team in Southern California. The expansion of the team is a strategic move by the firm to grow its retail investment sales and disposition capabilities. “JLL wants to have the best retail investment team in place to advise investors and landlords as the industry continues to evolve,” adds Kuruzar. “While the headline may say that retail investment is slowing, we think there is still great opportunity to invest in well located food and beverage retail as well as experiential, urban retail. Additionally, retail investors/landlords, in many cases have a great opportunity to reposition their asset and attract ecommerce companies looking for an access point for last mile or showroom space.”
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Kelsi Maree Borland
