Shopping Centers Today

MAR 2017

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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Page 36 of 59

M A R C H 2 0 1 7 / S C T 37 Developer capital favors urban centers for two primary reasons, according to Joe Dykstra, co-CEO of Los Ange- les–based Westwood Financial, which owns and operates roughly $1.5 billion worth of U.S. shopping centers. "First, land is scarce in urban cores, which drives tremendous value and adds a layer of developer protection," he said. "Lack of availability and high barriers to entry translate to a compet- itive edge for retail developers and owners who are already in urban markets." Then, too, urban areas boast quality de- mographics, Dykstra says. "Large urban areas have more peo- ple, higher incomes and more-disposable income." Suburban markets, by contrast, are experiencing a softening because of their lack of high barriers to entry, smaller potential for strong foot traffic and lower incomes, he says. Capital is flowing into the industry from a variety of sources, with life-insurance companies, pension funds and other large institutional investors seeking long-term real es- tate plays such as mixed-use lifestyle centers, loan facilitators say. But banks, private-equity firms, high-net-worth individ- uals and sovereign funds are also fitting into retail niches as B Y S T E V E M c L I N D E N $ borrower's market

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