2012 ended up with more than 100 properties trading hands. That is down a little from 2011. Prices are still below peak prices from 2008 ($240/SF) to just under $96/SF in 2012. That is still about a 60% price adjustment from peak.
Investors are searching out well located centers with value-add components. The best opportunities are the ones that are newer construction with very little capital improvements needed.
My prediction for 2013 is that sales velocity for retail center will continue at a strong pace. It is going to force capitalization rates to compress a little this year for the B to A property types. C and lower will still be purchased on a price per square foot basis. That range will largely depend on location. If the center is inside “the loops,” I predict the range to be in the $95-115 per square foot range. If the properties are located outside “the loop,” it will be in the $60-$75 per square foot range.
**Source: ORION Investment Real Estate Research & Costar. Strip Centers & Neighborhood Centers from 10,000 Sq. Ft. to 50,000 Sq. Ft.