A version of this article first appeared in the CNBC Property Play newsletter with Diana Olick. Property Play covers new and evolving opportunities for the real estate investor, from individuals to venture capitalists, private equity funds, family offices, institutional investors and large public companies. Sign up to receive future editions, straight to your inbox.
It would be an understatement to say that retail real estate has had a rough ride. It started with the birth of e-commerce and escalated with the Covid-19 pandemic. Its recovery has been splintered, given the varying subsectors of retail, from large indoor malls to big-box centers to grocery-anchored, open-air strip centers.
It’s that last subsector that Chad Phillips, global head of Nuveen Real Estate and responsible for over $140 billion of commercial real estate equity and debt investments, says is the big opportunity today.
“We’ve leaned into this resilient, open-air strategy the last two years pretty heavily,” said Phillips.
That’s grocery-anchored centers with, perhaps, a CVS and a pizza place and the like. Vacancy rates in these spaces were 7.8% at the start of 2016, but came down to 4.4% by the beginning of this year, according to data from CoStar Group.
