It was another robust year of attendance at last month’s annual ICSC RECon convention in Las Vegas. Much of what was said is rather repetitive at this point: the ongoing conversation of how the internet is affecting retailers, “densification” of the urban core, and the continuing demand for income property are a few of the topics we all hear again and again.
One theme I observed at the show is the tremendous amount of restraint that is present in the commercial real estate market. There is a disciplined expansion of retailers and restaurants, as well as visible discipline from developers and lenders. This continues to drive up rents and occupancies of existing retail properties.
There is also evidence of strong retail sales, which support the increasing rents—a trend we see locally here in Dallas-Fort Worth, as well as nationally. I spoke with a broker from Las Vegas. Their market got clobbered in the downturn. Today things are looking up; there are some significant new projects planned for Vegas, and they are experiencing new home growth as well. St. Louis is seeing good activity, too. I also spoke with brokers and developers from other parts of the country. Although there is not as much going on in terms of new housing, their retail markets remain very active and strong.
Overall, I came away with the feeling that there are many markets in the U.S. showing signs of growth, but it is much more conservative than in previous cycles. I feel fortunate to be located in DFW. Although things are “in check” here, we appear to have a much stronger economy than most of the rest of the country.
Finally, I believe that a common thread among the markets that are most active, including DFW, is that we all are attracting new business to our regions because we offer a higher quality of life and a business-friendly environment. Looking to the future, it is important for us to maintain these qualities to stay ahead in the highly competitive U.S. commercial real estate market.
Mike Geisler is managing partner of Venture Commercial. Contact him at [email protected].
