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| Creating Special PLACES |
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T
his second issue of PLACES comes at a time when the realities of a global recession are upon us. Consumer spending is down, vacancy rates are rising, financing costs are higher and property prices are finally beginning to soften. Now, more than ever, it is critical that we focus on executing true value creation strategies to preserve desirable investment returns.
For the past five years we have witnessed an unprecedented influx of capital into the real estate industry. That demand, fueled by a booming economy and new investment vehicles, pushed capitalization rates down to unsustainable record levels. While we have all benefited from that economic expansion, investors are now being forced to recalculate investment risk. We are witnessing cap rates starting to inch up in every region of the country and across all property types.
In this environment, the prudent investor will need to choose acquisitions carefully. We anticipate cap rates rising for at least the next two years. Any value-added investment opportunities will require sufficient upside potential to counteract pricing declines. The most successful investors will be those who can see value creation where others do not, often finding these opportunities in off-market transactions.
It is also critical for investors to seek ways to preserve the market valuation of their holdings. The best strategies will include creative ways to maintain occupancy in stabilized properties, fill vacancies by out-hustling the competition, control expenses aggressively and increase bottom-line revenue through adding GLA where it is economically feasible.
This issue features several thought-provoking pieces that are impacting our industry today, including strategies to attract and retain tenants, an evaluation of medical uses as anchors, ways to overcome high construction costs and how to program centers with events that attract shoppers and thus drive sales and increase value. We also explore the growth of international retail concepts in the United States and how Charlotte’s new light rail is transforming an old industrial enclave into a modern transit-oriented mixed-use community.
Please enjoy the issue and I invite you to join the conversation online via our new PLACES website and blog located at www.places-magazine.com.
Amer Hammour
Chief Executive Officer
Madison Marquette |
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Publisher
Kurt Ivey, SVP, Corporate Marketing & Communications
Editorial
Editor-In-Chief
Jeff Ingram, Ein Communications
Design
Design Director
Jacki Silvan, Senior Graphic Designer
PLACES Team
Angela Sweeney, VP, Marketing
Walter Bialas, VP, Research
Bryan Steffen, Research Associate
Isis Black, Marketing Coordinator
Editorial Board
Phil Akins
Greg Bergan
Merle Brann
David Brainerd
Denise Browning
Tom Gilmore
Jonathan Shartar
Anjee Solanki
Chuck Taylor |
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