Valuations for the Highest-Quality Shopping Centers are on Fire, So Where is All the Product?

by Nat Heald, Senior Vice President of CBRE/NE’s Capital Markets team (@NatHeald)

As we reach the halfway mark of 2014, it’s clear that valuations for the highest-quality shopping centers have reached a new peak, outpacing the records set in 2006/2007. Today’s market is characterized by an excess of aggressive equity capital, a steady supply of inexpensive debt and a level of confidence that enables significant investments in the future of our market. From a demand and pricing perspective, today’s market is the strongest New England has ever seen.

With valuations on fire, one might justifiably expect that 2014 would see a highly liquid market as owners take advantage of the significant run-up in values. Instead, investors have been left confused and often frustrated by the shortage of high-quality properties coming to market.

The challenge facing our market today is a dramatic disconnect between what most investors want to buy and what most owners are willing to sell. With a little flexibility on both sides, however, there is still a window of opportunity to make 2014 the banner year it ought to be.

To read the rest of the article covered by New England Real Estate Journal, click here.

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