Episode 4 – Retail Recap: Navigating the Financial Terrain
Tips from the Shop Floor
In this episode, hosts Jeremy Mercer, Will Narduzzi, Rob Franks, and Secure Net Lease’s Bob Moorhead dive deep into the current dynamics shaping the commercial real estate landscape, particularly retail and industrial assets. They cover everything from market shifts and tenant performance to zoning challenges and creative lease strategies.
Key Topics Covered:
Retail Tenant Performance
- Starbucks continues to oversaturate the market, but non-triple-net leases turn off investors.
- Chipotle remains a strong performer with long-term, true NNN leases.
- 7-Eleven is balancing its traditional convenience model with expansion into truck-stop formats.
Capital Markets & Bonus Depreciation
- 100% bonus depreciation may return by mid-year, potentially unlocking more buyer demand.
- Cap rates have widened slightly but remain attractive for credit tenants with long-term leases.
Distressed Assets & Reuse Strategies
- Walgreens/CVS closures present backfill challenges; some owners are exploring creative reuses.
- Bankruptcies like Party City and JoAnn are generating short-term leasing and redevelopment opportunities.
Winners & Losers in Retail Expansion
- Whataburger, Velvet Taco, Aldi, and Sprouts are growing, while chains like On The Border, Red Lobster, and Denny’s are shrinking or filing BK.
Industrial Hurdles & Zoning Friction
- Costly zoning overlays and surfacing requirements (especially in cities like Haltom and Frisco) complicate deals and increase timelines.
- Zoning-by-right assets are heavily favored in the current environment.
Urban Redevelopment
- Neiman Marcus’s downtown Dallas closure is a major cultural and retail loss.
- Redevelopment of aging malls like Willow Bend points to continued demand for mixed-use, residential, and experiential reuse.
This episode offers a wide-ranging and candid look at the evolving landscape of commercial real estate, blending market data, boots-on-the-ground deal experience, and plenty of real estate “war stories” that investors, brokers, and developers will appreciate.
How to Listen:
