Costar held a dynamic online webinar regarding the “Mid-Year Retail Report” which covered an economic update along with a report on the fundamentals of real estate in the retail sector. I think you might find some of this information helpful in your investment decisions over the remainder of 2011. Before you dive into the summary below and the report link, I would like to leave you with one question resonating in my head right now…..
When there is so much uncertainty in the government spending, unpredictability in the stock market yield, record high profits in corporations, and strong cash reserves held by “credit” retailers…… Why would you NOT put faith in fundamentally strong retail investments?
Have a wonderful weekend.
Link to Report: http://bit.ly/MidYearCostartRetail2010
REPORT HIGHLIGHTS
Retailers sitting on 7% cash reserves. Average historical reserves 4%-5%. Retailers are “sitting on cash”.
Stock market decline expected to affect consumer spending, but, not dramatically
Government debt crisis slowing growth and expansion
Overall, absorption of space is positive
“Borders” store closings expected to have negative impact on absorption
Mentioned chatter among the industry the “10yr US Treasury is artificially low”
Low construction and increasing absorption indicate rent increases could be on the horizon
Can lenders handle the tidal wave of maturing loans? see pg 34. Wow.
Cap rates average 500 basis points above 10yr treasuries
$19,400,000,000 in retail transactions Q1 and Q2 2011
Lenders focused on “Core Assets”
DEAL SWAP 6:18 pm on August 5, 2011 Permalink |
Please post your comments below. It would be interesting to hear your thoughts!