Retail Reconnaissance: Claudia Steeb and Joe Miller of JLL

MBA NewsLink talked with JLL Capital Markets Managing Director Claudia Steeb and JLL Valuation Advisory Managing Director Joe Miller about the retail sector. 

Claudia Steeb is a Managing Director in the Pittsburgh office of JLL Capital Markets, Americas. She has more than 30 years of experience in commercial real estate finance and investment advisory. She is primarily responsible for originating debt and equity transactions throughout the eastern United States and focuses on retail, office and self-storage properties and portfolio transactions. She has completed more than $14 billion in commercial real estate transactions during her career and has also underwritten, evaluated, financed and sold numerous regional malls.

As Managing Director with JLL’s Valuation Advisory service, Joseph Miller leads JLL’s retail team, which focuses on the valuation of lifestyle centers, regional malls and super-regional malls. He is responsible for performing various appraisal and consulting services for commercial lending, litigation and tax protest purposes. In addition to appraisal services, he manages a team of valuation professionals in the firm’s Chicago office, which includes client communications, appraisal review and mentoring junior appraisers.

MBA NEWSLINK: What is the market like for retail financing?

Claudia Steeb

CLAUDIA STEEB: The market for retail financing continues to improve, based on interest level from lenders as well as the number and dollar volume of closed loans. That being said, lenders remain conservative in their underwriting and expect to be paid for taking on the perceived risk associated with retail assets in the form of higher interest rates and/or fees, compared to the highly favored multifamily and industrial asset classes. 

Right now, we see a handful of loan quotes for many transactions, which is an increase over recent history.  My comment to clients is to take the deal that works best for you as owner of the asset.  

NEWSLINK: Is there capital available and from what sources?  

STEEB: Yes, capital is available for retail assets today and more so than in the past few years. Lender interest varies based on current exposure to retail assets within a portfolio, but we have received interest from life insurance companies–both from traditional programs and debt fund programs–banks and CMBS lenders as well as bridge/debt fund lenders, all at varying levels and terms. Grocery-anchored assets remain the most highly sought-after retail property and command the best terms–i.e., lowest interest rate, highest leverage and least amount of loan structure. 

This year, we have received loan quotes not only for grocery-anchored properties but for power centers, lifestyle centers, community and neighborhood centers, unanchored or shadow-anchored strip centers and even malls. There have been quite few loans closed this year for mall properties, with most of these loans for either for the A to A++ rated malls, or for acquisitions with redevelopment plans. Sponsorship and location continue to be dominant factors in financing retail assets, along with understanding the “reason to be” for each property. In addition, sponsorship must have capital available to continue to maintain and/or upgrade retail assets in order to maintain value.

NEWSLINK: What are you seeing in the retail equity markets?

STEEB: So far, there appears to be significant equity available for the acquisition of retail properties, with the strongest demand for grocery-anchored retail, where cap rates compression continues. However, due to the limited number of available grocery-anchored properties, there is also interest in other retail property types. It appears that investors who are being “priced out” of other asset class opportunities–especially multi-housing and industrial properties as well as the grocery-anchored assets–are considering investment in retail assets, provided they have the expertise with retail properties or will hire appropriate leasing and management personnel/companies. 

In my opinion, retail has become an operating business, which is why sponsorship becomes so important.

NEWSLINK: How are retail assets being impacted from a valuation perspective?

Joe Miller

JOE MILLER: From a valuation perspective, we are no longer being as conservative with market rent growth and risk rates as we were in the beginning of the pandemic. There are still some retail categories that are more conservative one, including theaters and large anchor tenants that had issues pre-COVID.

Overall, grocery-anchored centers are in high demand as long as the remainder of the tenants are strong as well. Smaller neighborhood centers have seen the lowest interest, with single-tenant net leased assets seeing the most activity and continued cap rate compression. We are starting to see tenant sales rebound, but they are not back to 2019 levels. This is showing a return to physical store retail sales and increased consumer demand. We are starting to see compression in retail risk rates, but they are still higher than many other property types in the marketplace (i.e. industrial and multi-housing).

STEEB: From a financing perspective, the view is that appraisers generally have limited sales information to use when valuing a retail asset. Cap rates on sales even from last year can be irrelevant based on the property. In some situations, there have not been any trades of comparable properties. It appears that lenders are scrutinizing appraisals in greater detail.

NEWSLINK: What is the outlook for retail lending in 2022? 

MILLER: I believe we will continue to see investor demand for retail, with grocery anchored and single-tenant net-leased being the most in demand.

STEEB: Based on the sentiment at the MBA CREF Conference and since then, it appears that lenders will consider providing debt for retail assets in 2022. With most lenders having real estate mortgage allocations equal to or greater than their 2021 levels, and the need to increase returns/yields, many lenders have indicated they will consider providing debt for the “right” retail assets. Finding the right mix between lenders and borrowers is the key to successfully placing and closing loans for retail assets.

(Views expressed in this article do not necessarily reflect policy of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes your submissions. Inquiries can be sent to NewsLink Editor Mike Sorohan at or NewsLink Editorial Manager Michael Tucker at