May
20

Investors Savor Higher Cap Rates and a Lack of Competition

By
– Retail Traffic

In the midst of falling property values and stagnant investment sales, Macquarie DDR Trust put a portfolio of 52 shopping centers worth a book value of $1.9 billion on the market in April. The venture’s decision immediately sparked heated discussion throughout the commercial real estate industry: Why put these assets on the market when valuations are so depressed? And perhaps more importantly, will they actually trade?

Experts speculate that Macquarie DDR desperately needs cash and is willing to brave the market to get it. Rich Moore, an analyst with RBC Capital Markets, doesn’t feel too confident the 12.5-million-square-foot portfolio will sell — either in its entirety or in pieces. Previously, REITs and their institutional equity partners would be the most likely buyers to acquire the portfolio, which consists primarily of power centers occupied by big-box retailers. Today, those investors aren’t buying, and those that are buying retail properties now aren’t interested in power centers.

ARTICLE SHORTENED DUE TO LENGTH….

LINK TO ARTICLE HERE:
http://retailtrafficmag.com/investments/analysis/investors-high-cap-rates-0501/

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