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- July 1, 2015: Vol. 27, Number 7

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Retail turnover: The uneven economic recovery has altered the landscape for retail

by Alex Frew McMillan

We all need to eat, and we all need to stay clothed. To the uninitiated, retail real estate seems like an easy defensive play, relatively resistant in any downturn. It is anything but, however, and the Great Recession has laid bare the shortcomings of any managers who thought they could simply buy and hold.

Opportunity is always present in retail, but with it comes risk. For investors, “retail has the widest breadth of investor opportunities,” says Peter Hayes, managing director and global head of research at Prudential Real Estate Investors. An evolutionary asset class, “it is constantly looking to reinvent itself. It is very aggressive.”

Retail can be a challenge to manage because it presents so many different options. The key ingredients are local demographics, the size of a center’s catchment area, and local incomes. Class A office may be easy to sit on, but a mall needs constant reinvention.

“The key difference fo

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