ICSC Recon 2016 proved the retail real estate market is recovering globally. As the world’s largest gathering of shopping center executives, the May 2016 convention had the highest turn out of attendees post-recession with more than 36,000 retail real estate executives and over 1,000 exhibitors from around the world. National retail tenants, developers, investors and brokers swarmed the convention floors looking to make personal connections in order to get deals started, advanced or completed. While there was plenty of deal making happening there were also plenty of glasses clinking, as the ICSC convention consistently generates more non-gaming revenue than any other convention, according the Las Vegas Visitors Authority, which tends to make those early morning meetings the following day quite interesting. ICSC Recon has generated more than $1 billion in non-gaming economic impact for the Las Vegas economy and brought almost 900,000 attendees to the destination since its first visit to Las Vegas in 1976.
There has been chatter amongst real estate professionals that retail brick and mortar could be declining, especially for “big box”. However, after speaking to several retailers at the convention it seems expansion of brick and mortar stores is greatly significant to the success of most brands. For example, supermarket chain Kroger brought more than 60 employees to Recon this year to stay on top of its $4 billion expansion plans nationwide. In a recent article in Bloomberg, “There is no question there is a lot of change,” Taubman Centers Inc. Chief Operating Officer Bill Taubman said in an interview at the convention, “But retail has always been about evolution. Someone is always bemoaning the change in the market and how it’s impacting things.” Although technology seems to threaten retail stores through e-commerce, the key is to embrace the technology by implementing it to create an experience for consumers. Using technology to reinforce brand recognition’s through social media, apps, and following the brand has allowed retail sales to continue to rise.
Retailers aren’t the only ones feeling bullish about expanding and believing in the strength of the market. Investors also took the floor of the convention in full force looking for development opportunities with retailers and seeking value-add as well as stabilized investment opportunities to deploy capital and fulfill 1031 exchange requirements. There are varying opinions as to where we are in the current cycle; however, relative to alternatives, commercial real estate continues to see strong national and global investment.
Recon 2016 was, by all measures, a successful event and a strong showing for the commercial real estate industry…but after three filled days of walking, talking and dining most attendees are ready to head home…especially those of us that are proud to call Las Vegas our home.