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June 13, 2012
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| Regency Centers prez Brian Smith and CEO Hap Stein say that for the past three years, the REIT has been cleansing its portfolio of smaller retailers that weren’t good operators and replacing them with best-in-class national, regional, and local tenants that will attract other strong retailers. Overall, the last three quarters of 2011 were Regency Centers’ best leasing quarters ever, and that has continued into Q2. Move-outs are abating, but about 50% of those are REIT initiated. It's looking for the operator versus credit tenant—for instance, it recently replaced a Safeway concept in Chicago (good credit) with a Mariano’s Fresh Market (good operator), and sales have increased $14M to $50M. |
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| The US continues to improve, according to (clockwise) Prologis Americas CEO Gene Reilly, CFO Tom Olinger, and co-CEOs Walt Rakowich and Hamid Moghadam. In fact, industrial has been the strongest it’s been since early ’08, with annual absorption north of 150M SF. E-commerce is a particular bright spot. But we’re still in recovery mode. Coastal areas like LA and South Florida are the strongest, with some already exceeding peak occupancy levels. Large companies with strong balance sheets are taking advantage of the market, so buildings 200k SF and larger are virtually full—something we didn’t even see during the peak. |
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| The expansion of the Panama Canal may mean more throughput to ports on the East Coast, including NY, NJ, Norfolk, Savannah, and Miami, but it doesn’t mean we’ll see a wholesale exodus from Los Angeles and Long Beach. It also doesn’t mean that real estate around the port areas will be winners—industrial will thrive in places where people are, like Atlanta, New Jersey, and Baltimore/DC. Check back on Monday for more from REITWeek. |
