Wednesday, May 26, 2010
Written by Ryan Pécot
Optimism that the worst is behind us is evident in the retail real estate market.
Although this market really didn’t get beat up that badly, it’s already looking as if Acadiana’s retail real estate market is picking up steam — and looking to gain solid momentum through the second half of the year. It’s welcome news for those of us in real estate, and apparently we aren’t the only ones taking notice. In mid-May online financial magazine Mainstreet.com named Lafayette one of 20 cities “surviving the recession” and creating new opportunities for job growth. While the deals here never came to the screeching halt like they did in other areas, it was much more difficult getting the blue ink to a lease or purchase agreement. There was too much uncertainty, but optimism is back on track.
Now that most of the distressed landlords throughout America have practically given away their vacant spaces to have just enough cash flow to prevent the lenders from taking them back, the sweetheart deals are done — and it is time to get back to the fundamentals. Sure there is still some low hanging fruit out there for retailers to go after to lock in long-term low occupancy costs, but they are much more limited than just six to 12 months ago. By this point in the cycle, most property owners have swallowed their Tums to ease the indigestion pains and are ready to move forward in this new retail landscape.
For brokers, deals are harder than ever because there are fewer tenants to market properties to with the bankruptcies that occurred during the recession, and the remaining retailers that are crawling back into expansion mode have become very conservative in the approval of new deals. The good news is that all of the smart merchants had become very lean during the downturn, and most have some cash burning a hole in their pocket ready to get back into growth mode. Retailers have historically been very sheepish, which means as soon as the first few expand and show good sales volumes the rest will surely follow. Combine that with the American consumer’s spending habits, and I expect measurable growth moving forward. Let’s just hope that the new credit restrictions keep the shopper in check to avoid another blowout.
That the retail real estate market is getting back to fundamentals should bode well for Lafayette, since most of our property owners didn’t give away the farm to the tenants who came begging. The majority of the big-box vacancies in the market are well located and surrounded by merchants that have had very solid year-over-year sales figures, which will only help excite new tenants as they do their research. Combine that with the newly opened Ambassador Caffery South extension, which finally produced the much-needed connectivity the national players look for, and we have a pretty good stew simmering in the ole’ Cajun kitchen.
Keeping brokers afloat have mainly been the small-shop deals that have closed, since they are a bit easier to get financed and can be done by local franchisees or one-off entrepreneurs who have confidence in Lafayette and don’t need approvals from corporate board rooms. I estimate that the Lafayette market has less than 10 percent small-shop vacancy; that segment is starting to get tighter, which will hopefully lead to new construction when the demand finally warrants it again. Getting financing for new retail construction will likely be the next headache requiring more than one extra-strength aspirin.
There is no doubt that activity has picked up greatly during the last 30-45 days, and all of the brokers I know surely hope it continues. If the retailers, brokers, developers and lenders all focus back in on the fundamentals that govern solid, smart growth, the light at the end of the tunnel will get a lot closer sooner than many thought in our markets. Be sure to thank those who learned to deal with crisis in the ’80s locally, as they are a big reason Lafayette stayed true to the rules of the game and the bubble burst didn’t sink us like it did back then.
Ryan Pécot is a commercial broker with Stirling Properties. Since 2001 he has worked out of the firm’s Lafayette and New Orleans offices.
Newcomer to Top 50 among five companies selected for Naval contract
INDstyle 2014 brings down house
Despite sweeping changes enacted by Gov. Bobby Jindal's administration, the health insurance program for state workers and public school employees will have to use $88 million from its reserve fund to cover its costs this year.
The LPSB races are sure to get heated between now and Nov. 4, and with only 9 available seats, this year's field of 20 candidates will surely be wanting to set themselves apart from the crowd early; they'll get their chance next week, starting Tuesday with the kick-off of a three-day series of candidate forums.
Lawmakers say they've received complaints that waits have spiked, with people being forced to wait in line for more than an hour — and sometimes three hours — to handle routine tasks.
Both sets of figures — adjusted to cancel out seasonal changes — were released by the U.S. Labor Department.
Texas declined by five rigs, West Virginia dropped three and Louisiana was down two.
The campaign announced that Rep. Stuart Bishop of District 43 and Nancy Landry, District 31, have thrown their support behind the Naval Academy graduate and entrepreneur in his bid to unseat current Hunter Beasley in District 8.
Three bedroom patio home or three bedroom traditional
Acadiana's nightlife guide.
Ramsey Morein prepares an old Cajun classic also known as chaudin in this latest episode of filmmaker Stephen Meaux's culinary series.
A Lafayette man with an alleged taste for child porn was busted Thursday evening during a cyber crime sting launched by the Attorney General’s Office.
We’re in the second year of the second term of the first black president of the United States. And so it might seem that as Americans, as a nation, we have come a long way. And perhaps we have. But the recent killing of Michael Brown in Ferguson, Mo., left me angry and sad. Here we go again, I thought.
U.S. Rep. Vance McAllister says his chief of staff is on temporary leave after being booked with drunken driving.
A federal appeals court in New Orleans has upheld a federal safety board's right to investigate the role of Transocean Deepwater Drilling Corp. in the 2010 Gulf of Mexico oil disaster.
It was a rare moment in Congress this week as Republicans briefly put aside partisanship in support of President Barack Obama's request to train and arm Syrian rebels, and while a number of Democrats opposed the measure, Louisiana's Democratic Sen. Mary Landrieu found herself on the same side of the issue as her Republican challenger Rep. Bill Cassidy.
Home Depot breach bigger than Target; Alibaba IPO could be big; Rivers' last project and more national and international news for Friday, September 19, 2014.
Friday's Blogs from the Bog!
In what world does it make sense to balance the budget for a public school system by cutting schools from the poorest neighborhoods?
A supporter of a lawsuit against the oil industry has been re-nominated to a seat on a south Louisiana flood control board despite opposition from Gov. Bobby Jindal.
City-Parish President Joey Durel is asking the council to sign off on a resolution approving a pair of deals that would lead to razing the seedy Lesspay Motel at Four Corners to build a new police substation as well as transforming nearly a block Downtown where the old federal courthouse building now molders into a mixed-use development.
Two bedroom cottage or four bedroom traditional
D.A. Mike Harson gets a gift from a federal judge as he tries to hang onto his job.
Acadiana's nightlife guide.
The eclectic beauty of modern, prints, boho
In 2013, the IRS — already the least popular governmental agency in the country — became the target of intense investigations after it was revealed that they had specifically and improperly scrutinized applications for tax-exempt status from organizations associated with the nascent Tea Party movement.
The nominating committee for the Southeast Louisiana Flood Protection Authority-East was set Thursday to nominate applicants for two people on the board whose terms have expired.
Improving the running game was "a point of emphasis" during the offseason and the results have manifested themselves in the form of substantially greater production.
Louisiana's health department said Wednesday that its evaluation of the state's Medicaid privatization was on target, despite criticism from the legislative auditor that it lacked key data and contained inconsistencies.
Restaurant could see ‘a little facelift,’ Bobby Butcher tells Daily Report.