Consumer confidence climbs

The International Council of Shopping Centers Florida Conference, which began Aug. 25, got off to a sunny start, particularly in retail commercial real estate.

One example is in an outlook report from Timothy Becker, director of the Kelley A. Bergstrom Center for Real Estate Studies at the Warrington College of Business Administration at the University of Florida. Becker reports that better economic conditions led to “steady improvement” in retail real estate through the second quarter. One key metric, says Becker, is the Florida consumer confidence index has reached 82 — its highest level since June 2007.

Respondents to a new UF Bergstrom Center emerging market conditions survey, adds Becker, project a rise in occupancy across all retail sectors. The respondents are also more optimistic about rents.

“Smart retailers continue to look for opportunities to trade up on location and benefit from a great rent, but we are finally at a point where rents are projected to rise with inflation across all the retail sectors,” writes Becker. “In the absence of a boom in retail development, we expect to see rents rising at inflation for the foreseeable future. These factors combine to make investment in retail real estate attractive.”
Becker, like many an economist, ends his report with a warning, one centered on uncertainty, the post-recession boogeyman.

“There is still uncertainty that we need to be wary of, including the eventual raising of interest rates, the continued implementation of Dodd-Frank regulations and the coming elections,” Becker writes in the report, part of a larger report commercial real estate firm CBRE compiled for the ICSC conference. “These issues have the potential to negatively affect the growth and optimism for real estate in general.”