Top Takeaways: ICSC@WESTERN 2023

November 2, 2023

Retail dealmakers, innovators, changemakers, and industry experts gathered last week for ICSC@WESTERN in San Diego, California. The Slatt Capital team members were among the thousands of attendees digesting insights from dozens of insightful panels spread across the 3-day event. The following is a selection of our key takeaways from the premier event.

Retail has made a significant comeback since the pandemic and remains at the forefront of many investors and lenders’ investment focus.
Rising interest rates have caused concern among investors/developers, but most of those owners are seeking capital outside traditional bank resources in order to execute business plans.
Access to capital appears more important than the actual cost of that capital.
Most conversations centered around owner/developers looking for construction and bridge loans instead of purchases or refinances. Many owners see tenant demand is still strong and driving development needs.
Interest rates have been taking the headlines, but the cost of insurance is flying under the radar and becoming a real cause for concern for future transactions. Sponsors are—or should be—adjusting their proformas to reflect a 20-30% increase.
Expectations are that tenants will start pushing back on annual rent increases.
AI will majorly impact the industry within the next 8-12 months. The speed and efficiency of new AI programs currently in development could mean additional competition (investors/sponsors) entering the market.
Focused strategies for landlords in today’s market:
- Location – Understand where you are investing and what the needs are of that community. Curate the tenant mix accordingly.
- Asset Management – Invest in the property to ensure it has the look and feel of modern amenities.
- Tenant Relationships – Maintain flexibility when working with your tenants on their changing needs (e.g., curbside pickup, managing how people navigate parking structures, EV charging stations, etc.)
Retail sales have grown 3.1% YTD (January – September 2023 compared to the same period in 2022)
A 3.8% increase in seasonal retail sales is expected from October – December 2023.
Suburban retail is strong, especially grocery-anchored retail.
A lot of dry powder is on the sidelines waiting to deploy into distressed assets.
Business is slowing dramatically in the luxury retail segment while the value side continues to do quite well.

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Top Takeaways: ICSC@WESTERN 2023