THE ECONOMIC DOWNTURN was not kind to shopping center owners, who saw vacancies rise, rents fall and investors flee as small shops struggled and retail bankruptcies rose in recent years. But according to some, it's also a sector that's finally poised to rebound.
Jeffrey Rogers, president and chief operating officer of Integra Realty Resources, New York, said investor interest is growing in grocery-anchored strip shopping centers with an eye on anchor tenants regaining strength and small shops leasing up again, at least in those neighborhoods showing signs of an economic recovery.
He said this trend — limited mainly at present to value investors willing to hold their investments while a recovering economy does its work — would portend a return to favor of market-leading grocers and the centers where they reside. He added, however, that it's volume, not size or positioning, that will matter most.
“Investors aren't looking for big stores or small stores,” Rogers told SN. “They're looking for well-performing stores.”
Noting that the recent Borders bankruptcy would soon bring more empty space to the market, developers are more willing to look to unusual tenant mixes if they can generate traffic together. Vornado's Rego Park Center in Queens, N.Y., for example, paired a Costco and New York City's first Aldi outlet.
“Any concept or mix that can generate traffic and money, shopping center owners are willing to try,” Rogers noted.