Methodology: This analysis differs from our previous analyses on net investments, as it includes transfers to lenders and investors as a result of foreclosures.
Capital trends in the retail sector are generally consistent with those for all property types discussed in the overview. One notable difference is dominant position the REITs have taken so far in acquisitions. Public REITs have acquired or committed to acquire nearly $3.5 billion of property against less than $1.0 billion of dispositions. Simon Property Group’s pending acquisition of Prime Outlets from equity fund Lightstone Group accounts for $2.2 billion of the increases in the REIT sector. Moreover, Simon has billions more available to spend now that it is no longer pursuing General Growth.
Private REITs have been the only other net buyer, however, lender portfolios have increased by almost $1.5 billion via foreclosures. Retail REO stands to grow even larger as General Growth has reported that it may return 13 properties to lenders. The largest retail REO recently closed with the sale of the Shoppes at Chino Hills in Irvine California selling for $94.5 million allowing the lenders to recoup approximately 86% of their claim, before expenses.
Data subject to future revision; based on properties & portfolios $5 mil and greater.
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