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Notes from the floor of the ICSC Convention from George Pandaleon

Inland Institutional Capital Partners' president and NAREIM board member George Pandaleon just got back from the 2014 ICSC conference in Las Vegas.  Below are some of his observations. ICSC Floor The ICAP team just returned from the annual International Council of Shopping Centers annual Convention in Las Vegas. The floor was busier than it has been for many years.  We thought you might be interested in some quick observations:
  • 33,000 registered attendees, including owners, investors, developers, exhibitors, retailers, bankers and attorneys.¬† Thousands more were hanging around the convention center, attending parties and networking.
  • Traffic Jams - With the crowd approaching pre-recession levels, ICSC may want to issue etiquette pamphlets.¬† People stopping to chat in the middle of the ‚Äústreet,‚Äù or even strolling slowly created big tie-ups and led to many late arrivals.
  • ICSC meets Times Square - The main entrance was surrounded by digital billboards.¬† Some were interactive - attracting people who played them like video games about real estate.¬† More traffic jams!¬† There was frenetic energy on the floor of the convention center.¬† The din of people talking (and often shouting), of music and narration coming from countless large screens and the buzz of business being done really did remind us of Broadway.
  • An upbeat feeling permeated the floor.¬† People were looking around, smiling, greeting one another.¬† Gone were the folks shuffling along downbeat, failing to make eye contact.
  • The North Hall was open for the first time in several years to accommodate an apparent influx of new exhibitors.
  • Lots of new deal flow - Inland acquisition professionals met with many developers and other owners showing them properties that they were preparing to sell.
  • Not enough space available - Retailers are challenged when looking to expand into new store locations.¬† Leasing agents at Inland and the brokerage houses reported many retailers struggling to expand their store count in the face of limited options.¬† Glancing into the booths (more like hotel lobbies), leasing teams seemed to always be busy.
  • Not enough space available - Many retailers had signs indicating the large number of stores they want to open.¬† The Walmart, Dollar General and Seven-Eleven booths, along with many others were jammed with people pitching their centers or learning about expansion plans.
  • The free food wars escalate - As always, the food retailers serving samples were mobbed.¬† Jimmy Johns and Auntie Anne‚Äôs Pretzels were providing large samples and caused major traffic jams with people standing in line for their samples.¬† McDonald‚Äôs coffee also drew crowds. Their booth was a desirable spot to take a break from the craziness of the floor.
  • Limited demand for development debt and equity - The ICAP team talked to several lenders, banks and insurance companies, and they indicated that there isn‚Äôt much demand for retail development debt or equity.¬† This leads us to conclude that the low level of new development for the last 5 years is likely to continue for a few more years.¬† However, we did hear that a couple of private equity firms were talking up their ability to provide debt and equity for premier development opportunities.
  • The Chinese have arrived - New this year was a large booth from a Chinese conglomerate, the Wanda Group, showcasing their Wanda Plaza shopping and entertainment centers in major Chinese markets, as well as their AMC Theaters here in the U.S.
  • Schools in shopping centers - Another new exhibitor was Primrose Schools, an operator of pre-schools.¬† Some vacant ‚Äúbig boxes‚Äù make for good school locations.
  • Main Street ICSC looks like Main Street USA - As is often the case on Main Street, CVS and Walgreen‚Äôs were across the ‚Äústreet‚Äù from one another. Both booths were crowded - showcasing their growth plans.
  • A tale of two retailers ‚Äì Sears has announced their intent to close roughly 60 stores in the next year, while Dollar General plans to open about 600 stores.¬† Dollar General‚Äôs booth was mobbed. Sears‚Äô was not.
Inland Institutional Capital Partners Corporation (“ICAP”) is an SEC registered investment adviser.  This registration does not imply a specific level of expertise, skill or training.  This registration does not imply a recommendation by the United States Securities and Exchange Commission or by any state securities authority. Past or projected performance is not necessarily indicative of future results. Statements contained in this report are based on current expectations, estimates, projections, opinions and beliefs of ICAP.  Such state­ments involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon.  Additionally, this report contains “forward-looking statements.”  Actual events or results may differ materially from those reflected or contemplated in such forward-looking statements. Certain economic and market information contained herein has been obtained from published sources prepared by third parties and in certain cases has not been updated through the date hereof.  Neither ICAP, nor any other entity that is part of Inland, nor any of their respective employees or agents, assume any re­sponsibility for the accuracy or completeness of such information. The companies referred to herein may have proprietary interests in their respective trademarks and trade names. Nothing herein shall be considered an endorsement, authoriza­tion or approval of ICAP by the aforementioned companies. Further, the aforementioned companies are not affiliated with ICAP in any manner. The Inland name and logo are registered trademarks being used under license.
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