Real Estate Journal Online

When Alvin Mansour, senior vice president of investments and senior director of Marcus & Millichamp Real Estate Investment Services makes a move, real estate investors sit up and take notice. So when Mansour recently closed $44 million worth of transactions on 11 different strip malls throughout the country, most analysts agreed that this indicated a major shift in interest on the part of private investors. In fact, all sellers in the transactions were developers and family trusts while all buyers were private investors[1]. Mansour admits that “the strip center segment has presented its share of challenges,” but emphasizes that “it is improving steadily along with the entire retail sector and lending markets.” He predicts that even secondary and tertiary markets will be in demand soon as private investors “vie for these strip centers.”

Mansour’s move comes on the heels of a recent analysis reported on by the Wall Street Journal indicating that the strip mall sector is still facing some pretty difficult times ahead as the “mom-and-pop” stores that frequently populate them struggle for survival[2]. Although strip malls have logged a 45 percent gain in valuations since 2009 and current valuations sit “just below” 2010 highs, WSJ reported that “strip centers are still hobbled by recession-related problems that other commercial-property sectors resolved faster”[3]. In fact, the analyst warned that strip malls are a likely candidate for another crash in the event of rising interest rates and a still-faltering economy, advising investors to “take their money and run” in that event.

Do you think that WSJ or Mansour has the right idea?

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