Notes from Chicago ULI — Fall 2013

Some high-level bullet points from our attendance at the ULI conference in Chicago:

– Of the ~37,000 transactions last year, ~31,000 were $10 million and under

– The spread between cap rates and treasuries is still at historical highs. The belief is this spread should normalize around 300 bps.

– They are currently over 450 bps apart.

– Fundamentals are strong, retail sales are growing, and overall growth is up

– Several references to “echo boomers” and the huge impact this demographic will have in driving value

– Capital will start to dabble in the “private” market (smaller balance deals)

– Need for groups to source deals and match capital to middle-market deals

– Retail cap rates have been skewed by single tenant net leased deals- highest demand since 2006