Retail Rents Climb
Oct 1, 2006 12:00 PM
Although volatile gas prices, rising interest rates, the cooling housing market and slow job growth are conspiring to create a rocky retail environment, owners are still pushing for higher rents in the sector. Nationwide rents are on pace to grow between 3 percent and 4 percent during 2006 according to Colliers International — but owners don't think they are pushing too hard.
“We do not set rents in a vacuum,” said Bruce Tobin, Simon Property Group COO and executive vice president, at a Retail Marketing Society meeting in New York in September. “Rising rents have been a concern for as long as I can remember, but we're actually behind on rent increases.”
According to Joseph Aquino, executive vice president with the New York — based brokerage firm Prudential Douglas Elliman, Americans will always spend a significant portion of their discretionary income on shopping.
Plus, retailers have been taking a closer look at their operations and streamlining supply chain models to make room for real estate costs, according to Mario Ciampi, managing partner of New York-based Trilea Partners. “Rents are really a function of supply and demand and the demand is there,” Ciampi said.
