NEW YORK CITY –The lead-up to the International Council of Shopping Centers' New York Deal Making Conference 2019 there was plenty of chit chatter that retail bankruptcy was on the agenda with January approaching or more talk about a retail apocalypse. However, that wasn't the case. A big topic among industry players from across a spectrum gathered on Manhattan's West Side and discussed their optimism about emerging joint ventures in the asset class, Joseph French, senior director of the national retail group at Institutional Property Advisors at Marcus & Millichap, tells GlobeSt.com.
Private investors and new investors are entering the retail asset class and buying properties with institutional investors who have once stepped back. Sliding back in, institutional players have teamed up with small developers in joint venture partnerships. And as the smaller entities now investing with access to institutional capital, they are playing in the $30 to $60 million range, whilst pooling raised capital from high net worth investors who have renewed retail interest.
Sole institutional buyers are little to none these days because some of the recent deals done have been at a 6% percent cap rate with an investment rate of return of 15%, which isn't as attractive. Whereas smaller investors who now have the access to institutional capital can buy at a better cap rate and better pricing, French said.
"For private and new investors coming into space and buying retail, where else are they going to get these kinds of returns," French said.
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Mariah Brown
Mariah Brown is the New York Bureau Chief and Real Estate Reporter for GlobeSt.com, covering the New York Metro area, Northeast region and national real estate trends. She is responsible for producing multi-media content, including articles, podcasts and video. Before joining the GlobeSt team, she served as a New York Times fellow, reported for the Associated Press in New York and Philadelphia and several other New York City-based outlets.
