ICSC 2022 – Let The Sunshine In
ICSC once again descended on Las Vegas after a three-year hiatus, unless you include the much smaller “Here We Go” event in December. A reduced but relatively healthy 20,000+ attendees found their way to the desert outpost by commercial or private jet for dealmaking, client dinners, night parties, miles of walking, and at least one Tesla giveaway.
The general atmosphere was raucous. Record 2021 investment sales, largely spurred on by historically low cap rates, low interest rates, and unexpectedly strong retail leasing activity across the country, meant attendees were feeling good about the world, despite the greater society’s concern over the state of retail in a post-pandemic world. Transactions and capital still seem to be flowing across the country and new entrants to the market were as excited to network as the old hats were to see good friends. Everyone seemed to proclaim “retail is here to stay.” Every meeting and casual conversation seemed to eventually turn to inflationary pressures, cap rates, and interest rates. Inflation and increased interest rates took most of the focus with cap rates less of a concern despite the trio being inherently correlated. “Wait and see” and “why worry” seemed to rule the day.
Still, despite the parties and good moods of the exhibitors, attendees, and the greater Las Vegas visitor population, small signs of the lingering post-pandemic economy were visible:
- ICSC had fewer tenants showcasing snacks.
- The conference operated on a smaller footprint than in peak years.
- Exhibitors complained of logistical difficulties setting up and staffing their booths.
- Hotels, bars, and restaurants were full but service wait times were much longer than usual.
- Rideshare services were forever at peak pricing and cab availability was difficult.
- News of peaking residential real estate values in greater Vegas leaked into commercial real estate conversation.
- Comparison of national gas prices was as natural as weather small-talk.
While we too have enjoyed the market’s incredible successes over the past few years, the contrast of the sky-high optimism on display at ICSC to what we know many of our investors are seeing on the ground and more what many main street folks are feeling in their pocketbooks right now was stark. We all made hay when the sun was shining, and it seemed to shine eternally on the Vegas strip this weekend even if eventually we too must return home. We are not immune and are definitely on board for some eternal optimism too—even if that optimism turns toward bias.
So, we lift our glass and say here’s to hoping the steady fist-pumping beat of the CRE music doesn’t stop anytime soon.