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Investment Sales Volume June 1, 2011

Posted by Sean Tufts in Articles, Blogs, Research/Data, Retail News.
Tags: , , , , ,

Retail investment continues to improve locally and around the nation. As data continues to roll in a clearer picture is starting to come together which mirrors what we have been seeing on the ground the last couple of months. Retail Traffic’s latest article explores the changes in the credit markets as capital starts to flow to other deals besides class-A core product. It also touches on the some of the reasoning behind the increased demand and resulting drop in cap rates.

Two of the biggest reasons investors have come back into the marketplace en masse are improving retail sales and record low interest rates. In April, same-store sales for U.S. chain stores, as measured by ICSC, rose 8.5 percent. Year-to-date, same-store sales are up 4.9 percent—a vast improvement over recent years, when same-store sales often posted declines. Retailers have gone from shutting down new opening plans in 2008 to mulling expansion in 2010 to actually signing leases this year.”

This year we have seen an increase of over 160% in dollar volume of retail centers sales in the Puget Sound compared to all of last year. If deal volume continues at this pace (which could happen if deals like the Kimco portfolio close) it will represent a nearly 400% increase in deal volume and record as the largest year since 2007.

Nationally, cap rates continued their fall for the fifth straight quarter. Below is Retail Traffic and Real Capital Analytics graph of retail cap rates and price per square foot.

The full article is well worth the read.



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