2019 is finally here! As we embark on this new year, investors will look to a world that consists of a strengthen economy with consist job growth in a tail ended real estate cycle. From technology, rising interest rates, economic conditions, potential political risks, omnichannel retailing, change of how brick and mortar space is used by retailers, chase for yield, debt market’s competition and global capital market flow, this year is sure to be an exciting one with many moving parts. The only constant is change and it is important for investors to keep a pulse on our evolving industry in order to best position their portfolio and individual asset’s for long term success!
Investors will continue to form a strategy in order to hedge downside risk in a chase for yield and take advantage of opportunities in whatever niche sector that they participate. Some investors will remain tight to their investment strategies of investing in core assets while others will look to deploy capital in value-add opportunities. The interest rate environment will continue to see upward pressure over the next 12 months, however capital is still relatively cheap to borrow for investors. Retailers will continue to lean up their business operations in order effectively merchant and learn how to maximize their assets and resources in this continued adoption of technology. The traditional space/square footage requirements will continue to morph and evolve as retailers incorporate and change store layouts and prototypes to meet the demand for online orders, pick-up and delivery. This effect will have an impact on how developers will look to build new shopping centers in order to cater to retailer demands. Existing shopping center owners will need to pay attention to this change and understand how this impacts their asset long term from a functionality standpoint and the ability to cater to prospective tenants interested in the location of their shopping center.