Retail Sheds Fears of Double Dip
The first half of 2011 saw strong leasing and buy activity, but after the debt limit negotiations last summer, the 2nd half was gripped by uncertainty and near certainty of a double dip. Fears subsided by year end and so far this year there has been strong activity beginning the second week of January.
Gerry Mason, head of Savills US retail group, also sees an improving market ahead. He noted that the retail property market is continuing to purge tired concepts and inefficient business models, which will ultimately lead to a recovery in the sector – albeit a slow one.
“Marginal improvements in second half of 2011 leave most cautiously optimistic about 2012,” Mason said in the Savills report, adding though that “slow recovery is expected as most companies will look to improve balance sheets and strengthen core portfolios.”
“Double-dip recession still lingers in the minds of some,” Mason said. “Many retailers are still pulling back the reins on expansion and growth plans amidst fears that fundamentals could erode again.”
The strength in the market is still triple net or absolute net, single tenant retail with an investment credit tenant. Multi tenant is still much weaker and will sell at around a point and a half higher cap. Of course much of this is due to the influx of out of areas owners. With multi tenant there is no such thing as “no landlord responsibilities”
CoStar News – Article – Retail Market Purges Fear of Double Dip