Due largely to uncertainties around the Federal Reserve’s course with interest rates, many investors in retail real estate are viewing 2023 as a transitional year requiring changes in near-term investment tactics, writes Cox Castle Nicholson partner Gary A. Glick.  Accordingly, “a significant amount of capital likely will remain on the sidelines until there is greater clarity on pricing and future market conditions.” 

However, Glick writes in a Cox Castle report, Capital Markets For Retail In 2023 – Searching For More Economic Certainty, “retail investors actively seeking opportunities likely will pursue the safety of top-quality retail assets that are better positioned to withstand expected headwinds due to favorable demand fundamentals or strong demographic support.”

Investment will get underway on a broader scale “once it becomes clearer that the Fed is scaling back on its interest rate increase program, and it becomes clearer that inflation is heading in the right direction.” 

Glick writes, “Over the past decade, grocery-anchored assets and net lease retail opportunities have dominated the retail investment landscape. Even with interest rate challenges, many observers predict that this should not change in 2023.”