Retail Commercial Real Estate is NOT DEAD! Despite of what you’ve heard about how Amazon killed retail, it is fake news.
The Amazon effect has made it challenging for older stores and malls that attempt to continue operating as they did twenty years ago. However, this challenged subset of retail is not reflective of the whole asset class. The rest of the class is doing great!
My guest, Commercial Real Estate Broker, John Crossman with Crossman & Company, discusses the retail sector and provides an overview for what is working.
What are the types of retail commercial real estate?
There are multiple types of retail real estate, including: strip mall, neighborhood shopping center, community center, power center, lifestyle center and enclosed malls.
Since the beginning, healthy retail has relied on the surrounding two miles of residents for support. This continues to be true today. If a community has jobs, and a minimum of 10,000 residents, you can have a healthy retail center.
What are the characteristics of a successful retail center?
Successful retail centers have a component of civic purpose. Centers that have been architecturally designed, without function continue to fail. People want and need connection with others. A successful retail experience provides this both a connection and a sense of community. A good example of a center is a grocery store.
Evolve and survive!
The rules have changed. You cannot limit your search to a big box retailer to fill an empty big box space. You have to get creative and look towards non traditional tenants such as; healthcare, education, office, church, and gyms.
The upside for these tenants is, less expensive rent than downtown, easy parking and access to retail shops & entertainment.
Tenant space requirements have changed. Space in the range of 800 – 1500 square feet is always in demand. Space that is larger than 1600 square feet is more difficult to lease.
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