Green Street met with a variety of retail owners and operators this month during the ICSC annual conference and found that sentiment was overwhelmingly positive on fundamentals with tenant demand remaining robust despite macroeconomic and recessionary concerns.
However, external growth opportunities are limited, which is frustrating management teams, due to assets for most US REITs trading at material discounts to net asset value.
Green Street said it will likely increase its fundamental forecasts "marginally" for malls and strips, but most recent estimates reflect the expectation that: 1) demand should remain resilient; 2) physical occupancy should continue to march higher in the coming years for most companies; 3) and leasing economics are improving, the firm said.
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