Real Estate Pros Boosted By Global Retail Meet

Retailers are now more interested in expanding. That is the major takeaway local commercial real estate agents had from this year’s International Council of Shopping Centers retail real estate convention.

Several local Realtors attended the event, known as RECon, May 18-20 in Las Vegas. The annual convention also attracts some of the nation’s largest retailers, restaurants and retail developers.

Steve Fineberg, principal of Steve Fineberg & Associates of Bentonville, said the networking opportunity “was a better show than in recent years,” because there was intense interest in doing deals, rather than just showing up to make contacts.

A longtime presence in the Northwest Arkansas commercial real estate market, Fineberg said there had been less activity at the annual ICSC conventions in the years following the Great Recession. “People attended, but they mostly looked like a deer in headlights.”

Fineberg said he was encouraged by the change in the overall energy of the meeting this year, coming from investors, retailers and developers.

T.J. Lefler, partner at Sage Partners in Fayetteville, agreed with this sentiment. He has attended the convention for the past seven years and noticed a difference this year.

 “The vibe was really, really positive,” he said. “Investors and developers are aggressively showing interest in expanding. They’re much hungrier than before.”

More than 30,000 attendees and about 1,000 exhibitors show up for RECon each year, according to ICSC. And, in addition to networking and deal-making opportunities, each event includes tens of educational sessions.

In addition to expansion, e-commerce and tax reform seemed to be the hot topics at this year’s conference.

Retail sales through the Internet still make up only a small fraction of retail business, but that percentage is growing each year and retailers take that competition seriously, according to a press release from ICSC.

RECon attendees said they are upping their game online. More retailers are offering home delivery and tapping into mobile apps and social media for promotions and special offers, according to the press release.

Also at the conference, several U.S. Congressmen spoke out against the Tax Reform Act of 2014, which they say will have a bad impact on commercial real estate.

A public-policy tax-form session during the conference featured a panel of three Congressmen, all former mayors, who urged attendees to educate their local legislators on what they said are the negative effects the regulations, including new restrictions on deferment of investment-property capital-gains taxes, would have on local businesses.

Other speakers at this year’s convention included experts from throughout the retail and real estate industries, include former Wal-Mart Stores Inc. president and CEO Mike Duke.

“People were excited about Walmart and their growth,” Lefler said. In particular, there was buzz about the mega-chain’s success in the expansion of its smaller and grocery store formats.

Overall, the convention confirmed what the agents already knew, that the commercial real estate market in Northwest Arkansas is on the upswing.

“We have a healthy market,” Lefler said. “Retail has been pretty full. There are hardly any larger, big-box store vacancies. There is building and construction going on.

“Almost everyone is in growth mode,” he added. “Many companies with between 40 and 60 stores are looking to expand their footprint further in Arkansas.”

Some of the larger, national chains are opting to invest more in new construction of their own stores, rather than obtaining space in shopping centers, Lefler said.

For example, North Carolina-based Family Dollar and its nearly 8,000 stores are a fixture in many strip malls, but the company is looking at building more stand-alone units, and Arkansas will be included in that expansion.

In addition, the business concepts that have come to test the market in Northwest Arkansas are doing well and are now looking to expand within the region, Lefler said.

Fineberg agreed with this observation and said he also felt a lot more interest from business concepts that would be new to the area.

“They are interested in doing more in Arkansas and there are a lot of people that are wanting to know more about us,” Fineberg said. “Our light on the map is growing.”