The State of Texas Retail: Who’s On First?
The pace of expanding retailers and restaurant concepts has created a battle over first- and second-generation locations in quality shopping centers, says Retail Solutions president and founder David Simmonds (right, with investment sales principal Ryan Hoff). This is particularly true of central Texas, where demand is well outpacing supply. Reasons include:
• The permitting processes time—primarily for site development permits.
• Low supply of quality land sites in high-demand areas for new developments.
• Very few existing property owners who are willing to sell at prices that make redevelopment in key submarkets financially viable.
David adds that every deal that gets signed takes extra effort and creativity to keep it from being snatched away by the next concept in the queue; it’s a welcome problem for landlord clients to have. Ryan adds that the feverish pace of late 2014 has lightened ever so slightly. Reduced activity is partially attributed to a surplus of 1031 exchange money that, combined with a low inventory of high-quality properties, has resulted in historically compressed yields to wrap up 2014. An abundance of capital from both investors and lenders continues to feed the market’s appetite for fundamentally strong properties into 2015. For more info on our Bisnow partner, click here.
