Top Takeaways from ICSC

One of commercial real estate’s largest annual gatherings for the retail market, the national ReCon ICSC conference, was recently held in Las Vegas. Major players from the retail sector were in attendance to compile crucial market intel, discuss emerging trends and network with notable lenders and brokers from around the country. We got the word straight from the conference floor on the latest developments—here are the important takeaways from the event.

+ The overall mood at the event was upbeat, which mirrors the positive activity in retail development, leasing, investment sales and financing.

+ Many active CMBS lenders were present, indicating that the conduit market has stabilized and is looking for new transactions. Contraction of spreads coupled with recent success in securitizations of the larger money center banks points to all in rates for 10-year fixed in the mid 4% range for traditional CMBS product. Lower loan-to-value transactions are being priced at rates closer to 4.00 – 4.25%.

+ Capitalization rates for strong retail properties have continued to remain at historic lows. This is a sign of high demand for investment in single tenant as well as multi-tenant net leased properties.

+ Vacancy rates for retail properties in core locations remain low.

+ As alternative investments fail to present themselves, there is a high level of interest in loans in the retail space from insurance companies, banks, and CMBS lenders.

+ The economy as it pertains to retail development and investments still has legs.

+ Construction lending at the higher end of the risk spectrum has started to tighten up.