Retail is Facing Changes in Post-Recovery Era
In a recent discussion with GlobeSt.com, Shari Tucker, council chair of retail investments for Sperry Van Ness, says that retail is at a point of much change. Here's a summary of the information shared with GlobeSt.com:
1) Bigger isn’t necessarily better now.
Though the retail sector is seeing fewer store closings at the same magnitude of 2008’s Circuit City bankruptcy, large-scale stores are still closing and when they do, large retail space retail landlords are facing a change similar to that which we are seeing in the office real estate market: smaller space demands. Many retailers how have less space requirements for better efficiency. This is leaving some landlords with a box that is too big for their potential tenant need. According to Tucker, this is leading to an added cost for demising the space.
2) Impact to absorption rates.
Another change is with absorption rates. Previously, this was a matter of whether retailers rented the space and, if the space went vacant, it was a matter of how quickly the owner was able to fill it. But now one trend that is emerging is retailers are now buying buildings and occupying them, which can leave less space available for rent.
3) What was old is new again.
A “new” trend in retail is actually the recycling of one from the days of catalog showrooms. Some players in the retail space are looking to house some product that consumers are purchasing online. This way the consumer can go to the store and pick up the item and avoiding shipping costs and delays. Tucker describes this as more like a distributor center model with a retail edge.
All in all, hope is not lost for retail leasing or ownership. In a recent report by SVN for “10 retail markets to watch”, Phoenix was named in the list for being proactive in rezoning and other measures to adapt to the demand in the changing retail market.
At Helix Properties, LLC we offer a variety of retail spaces. Check our Property listings to search available retail offerings or contact us today for more information.