Bridging the Buyer/Seller Expectation Gap for Retail in 2016


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Riley: “Adding value for our clients will need to be much more forward-thinking with creative strategies and not just dependent on cap rate compression.”

NEW YORK CITY—Major consolidations among institutions and retailers have shaken up the retail sector, tightening yields for the investor looking for safe returns. Will this trend continue into the new year? met up withShaun Riley, senior managing director at Faris Lee Investments, to get his take on the overall health and prospects for the sector in advance of ICSC New York National Deal Making conference. How would you assess the market this past year?

Shaun Riley: From a valuation perspective, the market has been very strong and resilient to headwinds such as the potential for rising interest rates and the continual loan maturity on over-leveraged properties. Cap rates on a select group of quality single tenant investments in certain geographic areas have dipped below 4% with cap rate compression across the board in all retail product types. From a macro level the economy has continued to improve, with lower unemployment and consistently strong sales in such key categories as automobiles and homes. Although wages have been suppressed, people are working again which gives retail real estate investors confidence…

Bridging the Buyer/Seller Expectation Gap for Retail in 2016

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