Shopping Centers Today International

JAN 2016

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

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Page 42 of 59

Record-high U.S. transaction volume destined to go higher yet Bill Rose, Vice President and National Director, Marcus & Millichap, National Retail Group and Net-Leased Properties Group Calabasas, Calif. I am very confident that 2015 will benchmark the highest volume of re- tail real estate investment sales ever in the U.S., exceeding our zenith in 2007, which was fueled by a lot of things, namely cheap credit. We are back into a very liquid market with very inexpensive cost of capital. It would be natural for the investor universe to think we are at the peak of the market again and wonder what will occur next. Is the market going to fall off? I do not believe so, given how the U.S. Federal Reserve is managing monetary supply today. We continue to enjoy an expanding U.S. economy. We have job growth, and other benchmarks are positive, including consumer confi- dence, new housing starts and durable- goods orders. Retail is the beneficiary of those positive trends. Also, there is not a lot of overbuilding, capitalization rates have continued to compress and vacancies to decline. In late 2015 the re- tail vacancy rate stood at 6 percent, on average, nationwide. This is a very different cycle than in the past, because the hard-asset category, real estate, is being pursued by a num- ber of patient institutional investors as well as by private clients. Private clients have been responsible for the bulk of real estate investment in all property types. Meanwhile, pension funds and REITs have been growing dramatically over the years. That is a good thing. It has a stabilizing effect on the real estate market. S C T J a n u a r y 2 0 1 6 / S C T 43 For the latest breaking news about shopping center development and the retail industry from Shopping Centers Today , follow @sctnews on Twitter and "like" us on Facebook .

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