Key Trends to Watch in Retail Real Estate

 

Al Williams and Michael Burden, Co-Heads of North America Real Estate Services, discuss four key trends shaping the landscape of retail real estate.

1. Continued Rise of Neighborhood Centers

Post-pandemic, counter urbanization increased as people moved from cities to the suburbs. With this shift, we have seen a renaissance within neighborhood shopping centers. Their growth, low vacancy rates and burgeoning consumer interest mark a pivot towards localized, community-based retail.

2. Downtown Retail Transformation

In the post-pandemic era, downtown retail that was previously energized by revitalization projects now faces new hurdles. While the landscape can vary from city to city, there are several factors affecting downtown retail that pose significant challenges.

3. Perfecting Omnichannel Innovation

Growing consumer demand for a meaningful shopping experience has influenced the way retailers assess the size and number of their physical locations. The successful retailer real estate strategy embraces innovation, leverages technology and creates locations beyond traditional retail stores and offer an experience that resonates with the modern consumer.

4. Retailers Challenge Status Quo

Proactive retailers, ones with best-in-class operations and approaches, understand the significance of conducting an annual evaluation of their entire real estate portfolios. Specifically, they scrutinize the bottom 5% to 10% of their store base to see how they can improve operations or whether to close stores, relocate stores, or negotiate for improved lease terms that are warranted based on prevailing market conditions.

Watch the video to learn more about these current trends and how they may affect the future landscape of retail real estate.