The retail real estate industry is adapting to change, and that is apparently not such a bad thing, though there is still hesitancy about the sector due to store closings and some malls shutting down and becoming repurposed into other uses.
National Real Estate Investor summed up several key points that retail CRE professionals voiced during the International Council of Shopping Center’s annual RECon event, the largest annual convention of its kind.
One point the publication observed is that competition is heating up for grocery-anchoredcenters, while power centers are a tough sell in the current environment. This makes sense because supermarkets are seen as being relatively impervious to online sales, while some big-box stores in power centers are hurting because they sell many items that can be purchased on Amazon.
On the mall end, NREI said that a Starwood executive predicted that today’s 1,200 malls will be cut down to 600 and stressed that many surviving malls will have non-traditional uses in the future, while those shutting will have a different commercial real estate reality.
There is also less spec building for shopping centers nowadays than in years past, according to GlobeSt.com in an interview with CAI Investments, one of its many reports on the conference. Instead, the industry will see more malls converted into fitness and healthcare facilities, while many big boxes could turn into distribution centers for in-store pickups. Failed malls in good locations, they said, could turn into mixed-use facilities.
Shopping Center Business concentrated on innovation in the industry while it deals with several changes, due to figuring out the balance between brick and mortar and online retail and shopping and entertainment. It quoted an SVN executive that said those boundaries will soon be broken down. Evidence was the embracement of technology at this year’s RECon as part of several sessions, as well as the RECon Innovation Exchange, which had exhibits focusing on robots, 3D renderings, body scanning and stores without checkout lines.
Bisnow also wrote about the event’s tech offerings, but also had an article focused on increased involvement by municipalities at RECon. Various from Chicago; to Converse, Texas; to New Orleans; to Kenosha, Wis.; were all represented and looking for ways to get more developers and retailers into their locales, showing that there is demand for this property type by particular cities.
So, retail is far from dead. RECon was just another reminder that the industry is changing at a rapid pace, and its no longer business as usual.
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