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California  + Los Angeles  + Retail  | 

Q&A: Scott Trafford and the Retail Trajectory

By Dennis Kaiser

Connect Media will sit down with the industry leaders on March 16 at Connect Retail West for a panel entitled: Investing in Retail: Strategies in 2017. Retail experts will examine what primary, secondary, and tertiary markets are piquing the interest of investors for new opportunities and portfolio growth. Scott Trafford of TH Real Estate, an affiliate of Nuveen – the investment management business of TIAA – shares with Connect Media what factors are driving decisions and where investors are looking next, as this sector continues to evolve in our latest 3 CRE Q&A.

Q: What trends do you see driving or impacting the retail investment market in the year ahead?

A: Everyone is looking for yield. The scarcity of high quality product, coupled with high demand to place capital from institutions and private equity is keeping cap rates low for the best product. I expect more of the same in 2017: to see the spread between highly desirable core/urban assets increase over secondary/tertiary markets. The general consensus from the market is interest rates will rise in 2017, but the range is up for debate between 50-100 bps by year end. Short term holders will look to sell at favorable cap rates, but struggle to redeploy that capital.

Q: How can/should companies adjust to meet the challenges?

A: Landlords should be mindful of short term leasing risk; on existing assets or an acquisition. Retailers are increasingly selective when evaluating new store openings. Leasing velocity continues to drag. If current market rents are below expectations, consider short term one to three-year deals or pop-up stores to keep occupancy up without locking in a long term lease at below market rents.

Q: What are the hottest investment markets or product types you see ahead?

A: TH Real Estate does not necessarily restrict retail to any particular region/submarket, but typically the company buys in gateway markets that demonstrate a few key factors, among others; highly liquid RE markets, strong demographics, and promising job growth. A careful eye on the strongest secondary markets could see opportunities to buy historically durable assets at favorable pricing.

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About Dennis Kaiser

Dennis Kaiser is Vice President of Public Relations and Communications for Connect Creative. Dennis is a communications leader with more than 40 years of experience including as a journalist and in corporate and agency marketing communications roles. He is responsible for Connect Creative’s agency client services and is involved in a range of initiatives ranging from public relations and content strategy, communications and message development, copywriting, media relations, social media and content marketing services. Prior to joining Connect Media in 2015, his most recent corporate communications roles involved leading a regional public relations effort across Southern California for CBRE, playing a key marketing role on JLL’s national retail team, and directing the global public relations effort at ValleyCrest (BrightView), the nation’s largest commercial landscape services company. He has worked on marketing communications assignments for such CRE companies as Blackstone/Equity Office, Carlyle, Caruso, Disney Resorts, GE Capital, Irvine Company, Hines, Howard Hughes Corp., Jeffries, Lennar, MGM, Marcus & Millichap, Prologis, Raleigh Studios, Simon, Starwood, Trammell Crow Company, Transamerica, UBS and Wynn Resorts. Dennis has also worked on communications and launch strategies for a number of consumer electronic, media and tech brands including SlingMedia, Channel Master, Deluxe Media Entertainment, BeIn Sports, EchoStar and Sprint. Dennis’s agency background included firms such as Off Madison Ave., Idea Hall and Macy + Associates. He has earned an outstanding reputation with organization leaders as a trusted advisor, strategic program implementer, consensus builder and exceptional collaborator. Dennis has developed and managed national communications programs for Fortune 500 companies to start-ups, both public and private. He’s successfully worked with journalists across the globe representing clients involved in major-breaking news stories, product launches, media tours, and company news announcements. Dennis has been involved in a host of charitable and community organizations including the American Cancer Society, Easter Seals, Boy Scouts, Chrysalis Foundation, Freedom For Life, HOLA, L.A.’s BEST, Reach Out and Read, Super Bowl Host Committee, and the Thunderbirds Charities.

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