Faris Lee: Abundant Capital, Sales Volume Rise as Investors Pursue Retail


Investment volume, capital and competition in the retail sector have been at unprecedented levels lately, leading to lower cap rates as well as more flexibility than investments in multifamily and industrial. The amount of capital and trade money in the retail market means that even with higher interest rates, the right location still inspires confidence, according to Don MacLellan, Managing Principal, Faris Lee Investments.

Interest in single-tenant net lease continues to be robust, with developers and investors heavily focused on that area. “That asset class has become a proven commodity investment, almost comparable to stocks and bonds. The single-tenant market is strong today and will continue to be strong,” says MacLellan.

Meanwhile, retailers outside the primary markets increasingly appeal to customers shifting to working from home at least a few days a week. The numbers of people working from home and a renewed customer desire for convenience mean that properties in secondary markets may offer higher yield and less competition.

Finally, retailers across the country who have already weathered the storms of the pandemic, inflation and supply chain disruption, as well as labor shortages have proven themselves reliable and resourceful, says MacLellan. This further inspires confidence in the sector.

Watch the interview for more insights from MacLellan about the new face of retail investment and what’s likely to come next.

Written/produced in conjunction with Irvine, Calif.-headquartered Faris Lee Investments, a content partner of Shopping Center Business and sponsor of the Retail Insight newsletter. Click here to subscribe. For more articles from Faris Lee, click here.
This video was created as part of the Retail Insight newsletter by Shopping Center Business, a brief newsletter series leading up to the ICSC LAS VEGAS conference and including post-conference video interviews. Watch all the 2022 Retail Insight videos here.