ICSC’s RECon is the Number One Place for Deals, News and Trend Spotting
With 32,000 attendees and over 1,000 exhibitors packing the Las Vegas Convention Center, ICSC’s RECon deserves its reputation as the “Super Bowl of Retail Real Estate.” Aiming to do a year’s worth of business in three days, attendees from across the globe gather to network, check out new and proposed retail developments, spot trends, increase their general knowledge and, most important, make deals. This year’s gathering (May 18-20) was no exception. Levin Management, as we have for years, was on the scene. And we want to share some of our observations with you.
The Heat is Back in Retail Real Estate
Levin’s general RECon takeaway jives with that of other attendees and with media coverage of this year’s event. The industry’s mood is upbeat and optimistic, approaching pre-recession attitudes. The momentum, which was lost during the downturn, continues to gain steam. Everyone in every area of our global industry –
retailers, retail service providers, and investors – is eyeing potential acquisitions or expansion in some form.
Investment Capital is Seeking Top-Quality Retail Real Estate Assets
RECon is all about deals and this year institutional investors and fund managers were out in full force, looking aggressively, but very selectively for opportunities. Yes, capital is ready to flow again but only for top-quality retail properties. Memories of the recent downturn are keeping investors cautious. Whatever the cause, institutional investors are very demanding about where they put their dollars. All the boxes have to be checked on every commercial real estate deal these days. Some of the must-haves include:
- Top notch anchor stores (a #1 or #2 ranked grocer, strong performing boutique grocery store or other market leading necessity oriented brands)
- Long horizon on anchor leases; lots of in-line credit tenants
- Strong area demographics; in-fill locations in high barrier markets
- Good physical plant with great visibility, access and flow
In other words, only the best need apply!
RECon is the Place for Retail Real Estate Trend Spotting
Like all large conventions, RECon was full of buzz about trends and directions. You pick this up at social events, walking the floor, in the booths and seminars, and in the specific media coverage of the event. Just as we’ve seen over the last few conventions, e-commerce and the growing power of the millennial shopper dominated both formal discussions and casual chat.
Online shopping is now an established consumer habit (not just a passing phase) and retailers are looking not just to compete with it, but to harness the power of technology – especially mobile tech – to win customers and enhance the appeal of the brick and mortar experience. Every retail website now is incorporating responsive design, guaranteeing that their look on mobile will be as satisfying as it is on the computer screen.
The digital natives of the millennial generation, who have never known a world without technology are, of course, leading this trend. By 2020, this demographic will be the largest consumer population. Mobile tech is central to virtually every aspect of their daily lives, so shopping is no exception. Value-conscious bargain hunters have led their parents into habits like pre-shopping for the best prices and using mobile couponing. Savvy retailers at RECon were talking about being “where the consumers live” and so, expect to see mobile tech continue as a leader among retailer trends.
The millennial impact is not limited by any means to the virtual world. Retail venues are recasting themselves to meet the tastes of this influential group. That means we’ll see even greater focus and proliferation of mixed-use commercial retail real estate developments. These “lifestyle” centers will go beyond shopping to include entertainment, dining, services, fitness as well as residential, mirroring the urban environments that have proved so appealing to millennials as well as the baby boomers, who want easy access to diverse resources in their retirement years. This mixed-use environment concept, already successful in some locales, will present opportunities for retail construction management services and for architects, particularly in redevelopment of existing properties.
Did you attend RECon this year? What’s your takeaway? Please share your observations with us here on our Retail Property InSites.
About Joseph Lowry: A 25-year industry veteran, Lowry specializes in evaluating for-sale shopping centers and sourcing off-market retail investment opportunities for Levin Management’s select institutional clients and high-net-worth investors. He also spearheads marketing of the firm’s full suite of third-party services – including leasing, property management, accounting, construction management and marketing – to institutions, fund managers and private owners, including both existing and potential new clients.