ICSC was as busy as ever with an attendance of approximately 36,000 people this year. With my first anniversary of joining The Niki Group approaching, I was happy to finally meet so many of the people I work with on a regular basis.
Some highlights of the show for me were meeting with: Mark Senn and his team from SEDA, Lior Regenstreif of Marcus and Millichap, Roberto Buenaver of Garrett Development Corporation, Jereme Snyder and his team from Colliers, Jeff Manelis of The Pederson Group, Jon Wheeler and his team from Wheeler REIT, Dan Hoogesteger of SIG, Jeff Wagner of NASB, Ryan Forsyth of Cushman & Wakefield and many others in the industry.
Despite the recent speculation that we are due for a cyclical recession, the overall sentiment towards the market I observed at the show was positive. Dr. Ben Bernanke—a guest speaker at a Marcus & Millichap event—noted that there are no signs of an imminent down turn. Bernanke did identify the global political climate with uncertainty in China and parts of the world as the largest risk of a shock to the economy. Most importantly, Bernanke reiterated that since the 2008 recession there continues to be a lack of high yield investments available to both domestic and foreign investors. I believe this phenomenon will continue to attract capital to the commercial real estate market and as a result cap rates will continue to remain low.
David Trakman asked Bernanke at dinner whether low interest rates and low inflation should be considered to be the new norm and Bernanke indicated that this was his expectation for the medium term.
Based on my conversations with other investors and what brokers are seeing in the market, low cap rates have allowed investors to capture significant gains in the recent flurry of sales. However, attendees also noted the difficulty in finding acceptable properties to acquire due to the low cap rate environment.
The challenge for us as a company is similar to that noted by several major REITs at a panel I attended. The panel indicated that they plan to acquire significantly fewer properties than they have in the recent past. The panelists also indicated they are looking at growth areas. Our criteria are not significantly different based on what we heard and we are working hard to find these scarce locations for our valued tenants and with our valued real estate partners.
Thank you everyone for a great week. I look forward to finding responsible and reliable investments for all of us at The Niki Group.