Report from RECon 2013—Vegas is Back, Baby!

May 21, 2013

D Real Estate Daily - May 21, 2013

As I go to check my bag at the D/FW Terminal D ticket counter, I start to see the familiar faces. By the time I get to the gate, dozens of real estate jockeys are huddled up in groups already talking deals. Once I take my seat on the plane, everyone is greeting fellow industry veterans as they walk by.

The mood is good, as everyone is headed out to Las Vegas for the International Council of Shopping Centers’ annual RECon convention, wasting no time starting to work on the next big deal.

There is good reason for the optimism this year. ICSC reports that attendance will well exceed 40,000 people, reaching pre-recession levels. It seems like everyone I know has virtually filled up their meeting schedules, not to mention the three cocktail parties and two dinners every night.

Retail is back. It really is. The volume of retail property sales is again up, debt is cheap and plentiful, and cap rates continue to compress.

Retailers’ demand for space is also back, with the opening store count up for almost everyone, and with far fewer store closings being announced. Developers have dusted off their old site plans or put together all new deals—and this time, they mean it. The appetite for new product appears to be real. Both occupancy and rental rates are up on existing product. REITs are announcing record income and FFO.

We’ll all look back at the end of 2013 and see if the momentum going into Vegas lasted, but for now it looks like the sector will continue to be strong. Regardless of how the year ends, 2013 will be the year that Vegas came back!

- John Zikos is a partner at Venture Commercial Real Estate