June 22, 2023 – With a rich history dating back to 1976, the annual Las Vegas-held ICSC national convention has consistently served as a vibrant hub for industry leaders seeking to cultivate and capitalize on profitable opportunities. This year’s show was no exception. ICSC Las Vegas 2023 attracted 24,150 attendees, a higher draw than last year’s 22,231 attendees.
Jim Becker, Senior Executive/Director at Goodman Real Estate Services Group LLC, has been attending ICSC Las Vegas conventions for the last 26 years. According to Becker, the 2023 convention exhibited high energy and enthusiasm for brokers, retailers, and developers alike: “Retail vacancy rates are the lowest in 15 years. As of Q4 2022, non-mall vacancy was 2.5% in the U.S. Despite challenges for retailers in 2023, consumers maintain their traditional spending habits and retailers are determined to meet their demands.” The uptick in ICSC attendance and the increased level of activity this year was consistent with what Goodman Real Estate Services Group experienced. We conducted 284 meetings, and our booth experienced a consistent flow of visitors throughout the event that were interested in learning about our company, the properties we are marketing, and the tenants and buyers we represent.
Additionally, this convention marked Goodman Real Estate Services Group’s second year attending ICSC Las Vegas as a member of ChainLinks Retail Advisors, the nation’s leading retail-focused real estate services and commercial property brokerage organization. We benefitted greatly from the many ChainLinks meetings we participated in as well as networking with new and existing brokers throughout this exceptional organization.
Following the busy two-day conference, Steve Altemare, Senior Vice President at Goodman Real Estate Services Group LLC, relayed some key ICSC takeaways:
- From a tenant perspective, the demand for quality locations is extremely high for freestanding buildings with a drive-thru.
- Construction costs, coupled with high demand, are pushing occupancy costs to new levels.
- Quality pad sites are also in high demand, which has pushed acquisition prices for single-tenant developments.
- Former quick service restaurant buildings are typically receiving multiple purchase offers and selling above asking prices.
Kyle Hartung, Vice President and Director of Investment Sales at Goodman Real Estate Services Group, noted the following Q2 2023 and ICSC Las Vegas 2023 update (Investment Sales):
- Long-term interest rates for commercial properties are widely fluctuating among lenders but have mostly settled between 6-7%.
- Due to rapid interest rate increases, demand in the single-tenant-net-lease market is reduced considerably from previous years, although activity has picked up noticeably since Q1 2023.
- Multi-tenant retail has seen the most demand and the most growth in demand during 2023. Cap rates in this segment remain high enough for investors to use debt in their acquisition and achieve yields above CDs and money markets.
- We have seen numerous investors formerly pursuing single tenant retail make a shift into multi-tenant, thereby adding buyers to the segment and keeping cap rates more compressed than the net-lease space.
- Bid/Ask spreads are starting to narrow as the newest developments listed have taken current market conditions into account.