Trends
Challenges and perspectives
Comment


Driven by heightened demand coming out of the pandemic, retail is on the rise. After a two-year hiatus, the full Innovating Commerce Serving Communities (ICSC) real estate conference returned to Las Vegas. Over 20,000 attendees from leading retailers, developers and real estate companies joined the conference to seal deals and pursue future growth.

Trends

There was a general feeling of excitement for the coming growth in the real estate sector now that the world is opening up again. The conference highlighted many opportunities for businesses, especially in the health and gastronomy sectors. A definite trend was health-related retail and medical retail. Many health medical retail companies have come out in full force in one of the fastest growing segments at the ICSC. This trend is expected to soon reach other parts of the United States, such as Boston.

Challenges and perspectives

Two different perspectives emerged on where the real estate economy is headed.

On the one hand, real estate investment trusts (REITs), investors and financial institutions seemed to be somewhat in apprehension about rising interest rates and some poor earnings reports that have recently been released, especially within the tech sectors.

On the other hand, retailers, developers and those working on the ground believed that the fundamentals are intact and strong, and they look forward to being more aggressive with new store growth and new developments all across the United States.

Of course, inflation, supply chain issues and construction costs going up are all factors that must be taken into consideration. However, the viewpoint of those companies actually building the shopping centres, and of the retailers who are leasing from them, remain steadfast. There are sturdy financing plans in place from 2021, and the sector is ready for regrowth.

Comment

Currently, there is a lag time in real estate development, and some pressure is needed on developers to start new projects. The focus must be on financing and ensuring that that is secure. This will be less of an issue for big retailers but more of a hurdle for some landlords and developers who may have to start raising rent amounts, which may cause some contraction.

For further information on this topic, please contact Eric Greenberg or Annie Malo at Seyfarth by telephone (+1 (312) 460-5000) or email ([email protected] or [email protected]). The Seyfarth website can be accessed at‚Äč www.seyfarth.com.