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Nine Takeaways from ICSC New York Conference, Day One

17-tablesAttendees at this year’s ICSC New York’s National Deal-Making Conference tell us the mood on the floor is generally optimistic, and the buzz of businesses filling the halls of level one at Jacob Javits Center seemed to echo that.

“There’s definitely energy at the show. The election is over, people are cautiously optimistic about retail,” says Hal Shapiro, senior director at Winick Realty Group.

Here we present nine takeaways from interviews with industry professionals on the show floor.

  1. Deals are taking longer to close, as the decision-making for site selection is becoming a longer process, says Anjee Solanki, national director of U.S. retail services with Colliers International. Retailers are becoming more active in site selection and more selective in the types of store formats they want in specific markets. “Retailers are now asking to see the numbers,” Solanki says, adding “data is a must” in their strategy decisions.
  2. Rents undergo a market correction: The softening of rents across some retail property types shows “the market is correcting,” Solanki says. “Deals are still being done, especially if you have good co-tenancy and location, but you are no longer going to garner rents like seen at the peak.” For tenants with good financial standing, landlords are now willing to offer not only several months of free rent, but also help with build-out costs, Shapiro says.

For more, download the full article in PDF

national-real-estate-investor-12-2016_nine-takeaways-from-icsc-new-york-conference-day-one

Winick Realty Group is one of New York’s prominent real estate firms specializing in retail leasing and advisory services.  Over the years, Winick Realty has served a broad range of domestic and global clients, with a strong emphasis on long-term representation and expansion and growth strategies.  Winick Realty Group is highly recognized as a forerunner in the retail real estate market.

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Breaking the Bank

spotlight on retailOverall, 48 percent of respondents expect cap rates to increase nationally in the next 12 months. Additionally, 26 percent see no change and only 25 percent expect further declines in cap rates. On average, respondents expect cap rates to rise about 10 basis points in the next 12 months. Respondents estimated that cap rates for all retail types nationally are around 6.5 percent currently.

However, respondents expect more stability within their own regions. When asked about cap rate outlooks within the regions they operate, 42 percent said they expect increases, 35 percent expect no change and only 21 percent expect further declines.

“Cap rates correlate to borrowing rates, so until we see an increase in the benchmark treasuries, cap rates will continue to stay stagnant and move in correlation with borrowing rates,” says Jimmy Board, managing director of JLL. “The Fed just announced they plan to keep interest rates low until early next year so for the next eight to 12 months it’s anticipated that investment will stay pretty consistent with what we are seeing in today’s market.”

When it comes to making investment decisions, 23 percent of respondents say it is the time to buy retail and another 45 percent say they plan to hold. And 32 percent say it is time to sell.

“Those that are holding are the winners,” says Yardi’s Kern. “There are not a lot of reasons to sell right now and the future cycle favors a longer hold period. Retail will rebound as the year proceeds, but not faster than inflation until next year.”

“There are a lot of institutional investors looking to buy retail, however it is still seen as a ‘product-starved market,”’ so due to the tax burden of selling without 1031-ing into a new deal, a lot of investors are electing to hold existing assets,” adds JLL’s Board.

Respondents were asked what kinds of retail assets currently offer the potential for the highest yields. A healthy number of respondents pointed to some of the usual suspects, such as grocery-anchored strip centers, single-tenant net lease assets and value-add opportunities, while others suggested other opportunities.

One respondent wrote, “Development of strip, anchored and power centers in high-demographic growth areas. Everything else is fully priced.”

Another wrote, “Foreclosures, as they have not been managed by the banks and have upward potential for occupancy and rental rates. They do need more capital infusion after purchase for build outs, leasing etc.”

Mixed-use—an asset class that fell out of favor in the wake of the recession—also popped up as an answer by several respondents.

One wrote, “Mixed-use, urban infill are probably the most attractive. We are seeing more new construction of properties in the Atlanta area that offer mix of office, retail and multifamily.”

Overall, 57 percent of respondents say that capital is more widely available today than it was 12 months ago. Thirty one percent say capital availability is the same. Only 4 percent say there is less capital in the market.

United Realty’s Frydman points to an abundance of capital in real estate funds as one factor fueling investment.

“In order to deploy this dry powder, investors have to re-risk to earn outperformance while seeking yield,” he says. “Re-risking means adjusting the risk/reward balance in the opportunities investors deploy capital into. Investors focusing on core markets and core assets are paying very low cap rates with modest upside if we find ourselves in a different rate environment. Equity is not overly abundant, but there is ample cash seeking to be put to work in hard assets.”

Some 52 percent of respondents expect LTV ratios to remain flat, while 39 percent expect an increase. Only 8 percent expect a decrease. In addition, 57 percent of respondents think loan terms will remain unchanged in the next year. Another 31 percent think they will loosen and 12 percent think they will tighten.

In addition, 57 percent of respondents think loan terms will remain unchanged in the next year. Thirty one percent think they will loosen and 12 percent think they will tighten.

“I believe lenders are trying to show the rating agencies that they are more disciplined this time around so LTVs should remain flat for now,” Frydman says. “Since regulatory changes have been implemented, banks must keep more of the below investment grade bonds backed by the loans they sell in a securitization. This, coupled with the fact that these residual pieces of the securitization transaction that they retain are now conservatively measured against their regulatory tier 1 capital, means they are thinking harder about what they put into these deals–for the time being.”

In terms of the bigger picture, 76 percent of respondents expect interest rates to increase in the next 12 months. Only 2 percent think they will decrease. Meanwhile, 21 percent expect them to remain flat.

“Even if the government decides to move forward with a rate increase I don’t see it having a major effect on cap rates for some time,” says Michael Cleeman, senior vice president of investment sales, Winick Realty Group. “There is still way too much capital trying to buy into real estate now due to a lack of alternatives for investments. With tons of cash sitting on the sidelines trying to find opportunities to be deployed and strong demand from 1031 exchange buyers that continuously feed the market, the pressure on cap rates will keep them from rising near term. Eventually investors will look for better returns as rates increase, but there will still be a disconnect between buyers and sellers which will push off any rise, I believe, until at least 2016.”

For more, download the full article in PDF

national real estate investor 05-2015_Breaking the Bank

Winick Realty Group is one of New York’s prominent real estate firms specializing in retail leasing and advisory services.  Over the years, Winick Realty has served a broad range of domestic and global clients, with a strong emphasis on long-term representation and expansion and growth strategies.  Winick Realty Group is highly recognized as a forerunner in the retail real estate market.

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Winick Realty Launches New Jersey Investment Sales Division

urszula zoltek 2Winick Realty Group NJ launched an investment sales division. The new department will focus on all types of assets, including net-leased properties and shopping centers throughout New Jersey.

Winick hired Urszula Zoltek to lead the New Jersey investment sales team. Previously, she worked for Marcus & Millichap Real Estate Investment Services and Edgewood Properties.

“The investment sales market is red-hot right now, with a substantial amount of business that reaches pre-recession levels,” said Tyler Bennett, founding partner of Winick Realty Group NJ, in a statement. “We believe it is the right time to launch an investment sales division to meet this demand, as well as provide another level of service to our investors that extends our scope beyond that of our competitors.”

For more, download the full article in PDF

national real estate investor 07-2013_Winick Realty Launches New Jersey Investment Sales Division

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Blink Fitness Signs 15,500 SF Lease at Chelsea Park Building

alexander-hill-profile-003Blink Fitness has signed a 15,500-sq.-ft. lease at 260 West 26th Street, a new residential building called Chelsea Park. Winick Realty Group’s Alexander Hill represented the ownership in the transaction, while the tenant was represented by Peter Levine of Charter Realty & Development.

Blink Fitness will occupy the lower level of the property and will have a ground-floor entrance at 308 Eighth Ave. on the southeast corner of 26th Street.

Chelsea Park is a 12-story property located on the corner of Eighth Avenue and West 26th Street. The building contains 204 luxury rental apartments ranging from studios to two-bedroom units.

For more, download the full article in PDF

national real estate investor 05-2013_Blink Fitness Signs 15,500 SF Lease at Chelsea Park Building

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CVS Leases 21,159 SF at 3 Columbus Circle for 15-Year Term

3-COLUMBUS-CIRCLE-NEW-imageCVS Caremark has signed a new, 15-year lease to occupy 21,159 sq. ft. of space at 3 Columbus Circle. The tenant will occupy the portion of the ground floor that is currently vacant, as well as a portion of the second floor.

Jason Pruger, Newmark Grubb Knight Frank represented CVS in the transaction, while Jeff Winick of Winick Realty Group acted on behalf of the landlord, a partnership between SL Green Realty Corp. and The Moinian Group.

Previously known as 1775 Broadway, 3 Columbus Circle contains 768,565 sq. ft. of office space and occupies the entire block between Broadway and Eighth Avenue. The 26-story property was recently redeveloped to include a new glass façade, relocated and expanded lobby, new elevators, bathrooms and security upgrades. Young & Rubicam is the property’s anchor office tenant.

For more, download the full article in PDF

national real estate investor 04-2013_CVS Leases 21,159 SF at 3 Columbus Circle for 15-Year Term

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Winick Realty Group Tapped to Market Availability at Toms River Center

tyler-bennett-profile-001Ashkenazy Acquisition Corp. has tapped Winick Realty Group’s Tyler Bennett, senior vice president, to serve as the exclusive broker for two retail availabilities totaling 9,900 sq. ft. at Toms River Center in Ocean County, N. J.

Bennett is marketing two vacant storefronts at the shopping center, which includes tenants including Kohl’s Department Stores, Super Foodtown, Modell’s and Five Below, among others.

Totaling 251,000 sq. ft. of retail space, Toms River Center is located off of exit 82A of the Garden State Parkway. The property is in close proximity to Main Street and Route 37, as well as the courthouse and office buildings.

national real estate investor 04-2013_Winick Realty Group Tapped to Market Availability at Toms River Center