There are plenty of articles on the internet that address relevant trends in retail real estate. Often these articles are written from one person’s perspective or from the vantage point of one segment of the industry. The articles are interesting, but they don’t necessarily tell the whole story. So we took matters into our own hands.
A few weeks ago, LeasePilot sent out a poll to approximately 1,000 retail real estate professionals from all corners of the industry to gauge the top trends of 2017. Cue the drum roll…the results are in…
The top 3 trends for retail real estate in 2017 are:
- Densification/Urbanization and Smaller Store Formats.
- The Impact of Amazon on the Retail Landscape.
- Big Box Bankruptcies.
Other top trends receiving votes include: (i) the emergence of pop-up stores, (ii) the rise of experiential shopping/dining/entertainment, and (iii) the disappearing middle class: splitting into low end (Dollar Tree) and luxury (Tiffany’s) retail.
Do you agree? Disagree? Are you shocked that something was left off the list? We’d love to get additional feedback. If you didn’t get invited to participate in the poll (we’re sorry) or you simply forgot to respond (we get it, you’re busy), your insight is still valuable! Simply click here and share your perspective on the top trends in retail real estate for 2017.
One of the biggest takeaways here is the manner in which the trends strike at the very core of the industry – leasing. For instance, the trends discussed above impact such fundamental leasing concepts as premises size (smaller store formats), term length (the emergence of pop-up stores), in-store sales (the impact of Amazon on the retail landscape) and premises usage (the rise of experiential shopping/dining/entertainment).
The fact that the 2017 trends don’t simply tinker around the periphery of the industry is telling. It reinforces the fact that the evolution of retail real estate is very real (this was also one of our takeaways from the ICSC RECon conference) and not just a passing fad. Real estate companies and retailers will fail if they don’t evolve as well. With core functions such as leasing, there is a tendency to ere on the side of being conservative. But the strongest companies in five years will be those that are right now able to be nimble, think outside the box and be creative with leasing while simultaneously balancing the need to reduce risk and maintain institutional control/consistency. Easier said than done.