Key Takeaways from the 2022 ICSC Western Conference
The ICSC Western Conference held last week in San Diego was attended by our producers and many of the retail industry's best developers and tenants.
Below you will find a summary of our key takeaways:
Leasing trajectory seems to remain consistent in the face of economic headwinds. There seems to be no hesitation from tenants to move forward with signing leases and expanding, which might go against what you see in the news.
There is an abundant amount of capital available for retail. Lenders will have huge new allocations for 2023 and we will see if spreads compress to get help fight against the recent increase in treasuries.
Lenders will be refocusing on tenant mix and quality. Big-box is still tough as there is a preference for well-located strip centers and grocery-anchored centers with a focus on necessity retail.
Mid-market fashion retailers are not favored by lenders. The expectation is a consumer flight to low-cost bargain retailers as the economy contracts.
Economists largely expect that rates will continue to rise and then begin to come back down to around today's levels beginning at the end of Q1 2023.
As the market stabilizes, albeit, at higher rates, recent volatility will moderate to bring down the cost of rate caps which have hindered short-term floating rate borrowing.
Cash-in refinances are already becoming commonplace as debt service constraints are the limiting factor for loan proceeds.
Those unable/unwilling to inject fresh capital will become sellers which might force an increase in inventory coming to market putting upward pressure on cap rates.
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