Shopping Center Business

MAY 2015

Shopping Center Business is the leading monthly business magazine for the retail real estate industry.

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296 • SHOPPING CENTER BUSINESS • MAY 2015 U.S. GDP growth of 4.7 percent in the third quarter of 2014 and more consistent job growth over several months served a strong indication that the economy was on the verge of booming. But fourth quarter GDP growth of 2.2 percent coupled with estimates that first quarter 2015 GDP will fall below 1 percent have tempered optimism. Economists and other market analysts largely anticipate that the Federal Reserve will tighten monetary policy to push up interest rates later in the year as the econo- my approaches "full employment." How- ever, similar expectations over the last few years have gone unfulfilled. Even if interest rates do rise, profession- als maintain that they will have minimal influence on net least property buying and selling so long as the rates move up in a measured manner. They also expect an eventual increase in cap rates to lag any interest rate hike by three to six months. "While interest rates have been some- what uncertain, cap rates have continued to compress on a year-over-year basis," Fritz says. "That speaks to demand." Some observers also downplay worries about an overheating net lease property market. Shipman notes that net lease ten- ants tend to renew at a high rate at proven locations. Kyle Matthews, an executive vice president for Colliers International in El Segundo, California, argues that most investors in the sector remain risk averse and are often proactive in approaching tenants to renew leases. "There is some frothiness, but nothing like in 2007," Matthews says. "In 2007, all of the market fundamentals were screwed up — you had tenants signing leases at rents that were unsustainable based on their sales or projected sales." SCB welcome to the future... of Retail Imagine it. A retail environment featuring fresh, attractive shopping centers where tech-savvy consumers take advantage of both brick-and-mortar and mobile shopping opportunities. A place where national brands complement one another in a retail mix that drives customer sales. And a location that boasts preferred demographics within a sustainable marketplace. Add to that a historic, walkable downtown where specialty retailers offer unique products and services. A destination where locals and visitors come to "experience" shopping and dining at its best. This is the future of retail and you can be a part of it... in Redlands, California. It's time. find your future in Redlands For more information on retail opportunities, contact the City of Redlands Economic Development Division at (909) 335-4755 or RedTeam@CityofRedlands.org Coming October 2015: InterFace Net Lease New York City For more information, contact: Richard Kelley, Senior Vice President InterFace Conference Group (914) 468-0818 or rkelley@francemediainc.com

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