Financially Prudent Retail REITs Can Differentiate Themselves, Green Street Says

DJ Busch, managing director at Green Street Advisors, participated in a video interview at Nareit’s REITwise: 2018 Law, Accounting & Finance Conference in Hollywood, Florida.

Busch is the lead analyst for Green Street's retail team. Owners of retail real estate are assessing individual assets in their portfolios and deciding which ones are worth investing further in, and which ones to jettison, he noted.

“The bar is getting higher on what qualifies as quality in the retail space. If you look back five years ago, the portfolios today are much higher quality and better-positioned,” Busch said. Location quality is paramount in the retail space, and also plays a significant role in Green Street’s retail analysis.

Busch advises that retail REITs should focus on maintaining a good balance sheet, and ensure adequate access to capital, as the transition in the sector continues. He adds that REITs that are able to invest, and have solid financials, will be able to distinguish themselves from other retail REITs in the future.

Meanwhile, those online retailers that are establishing physical locations have a wealth of consumer data and are in a better position to be successful with their physical stores, according to Busch. However, there are still many big retailers who are looking to downsize. “Those are inevitable and they will happen. There is going to continue to be this uncertainty and transition as we move from the old guard to some of these exciting new concepts,” he said.