Retail development at top levels the type that Oliver McMilan doing is focused on the design and the feeling it creates with users.
Retail sales per foot is an issue now. The sales of retailers are lower and it will effect rents. Urban outfitters CEO came out with comments that they have too much retail which mean they will close stores many retailers are in the same boat.
Landlord are getting creative about monitoring their centers. They also use social media in a big way to relate to users and customers. For example, landlord use cameras not for security but to see were are the hot spots in thier facilities.
New retail delivery systems will occur And the Market will adapt. There are many absolute retailers out there and they will disappear. Retail is now very brand oriented and destination oriented with retailers that are trying really hard to connect with customers. Retailers and Landlords are collaborating these days because they have no choice. Understanding future customer demands and needs will help growth for the retailers.
Gyms like 24 hours and LA fitness are expanding rapidly. The fitness industry are taking more vacant boxes. 24 hours fitness are steaming workout on the web and having a digital magazine in an effort to innovate and add revenue channels. Vanity tenants like spa, hair, nail products are doing OK and new concepts are coming in. Food tenants came back in a great way after the recession. Food trucks are actually good for retail because it allows entry to the food restaurant business in a better way. Home goods and pet shops are looking good now too. Amazon looking to do brick and mortar stores. Tenants that are local non credit are the ones to look for since they will create value especially in urban setting.
Consumers are much more sophisticated they are expecting more today and they shop in a multi channel environments. They are influenced by reviews, peers and all types of media.
Technology is effective in changing the retail market, but trends in branding and the way consumers shop are effecting retail real estate even more.
Institutional investors are looking today at a space by space and understand the experience of consumer. Underwriting all type of retail is more difficult. Investor realizing that Sales and profitability is the most important investment items to look at. How are the tenants doing? In NYC we see today a entrenchment of rents as capital market got a head of itself.
