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Connect Retail West Event Set for Next Week
By Dennis Kaiser
Connect Retail West is just around the corner on Tuesday, January 22, 2019 at The Resort at Pelican Hill in Newport Coast, CA. Leading up to the event, Connect Media asked one of the participants, GPI Companies’ TR Gregory, to share insights in our latest 3 CRE Q&A on the biggest retail trends he’s tracking, what’s on the horizon for 2019 and the opportunities and challenges he sees ahead.
Q: What are some of the bigger retail trends you are monitoring these days?
A: Experiential retail – while daily needs tenants such as grocers and drug stores will continue to be important anchors of neighborhood centers, we’re seeing a rise in occupancy from theatres, high end fitness, large format food & beverage, bowling, and other experiential tenants. This “internet resistant” trend is a response to growth in e-commerce.
Density / mixed use – with rising land values and expansion of our transit infrastructure, we’re seeing densification of development and a focus on transit-oriented mixed-use to take advantage of new modes of transportation.
Consolidation – the grocer space continues to consolidate, with new players entering the market and forcing existing brands to modernize and join forces to compete.
Creative re-purposing of big boxes and malls – we’re seeing a transformation of the large format landscape as traditional department stores shrink their national footprint and malls in turn evolve, including re-purposing with residential, creative office, smaller format retail, hospitality, medical and educational uses.
Q: How do you see the retail sector shaping up in 2019?
A: We are at or near the end of a long upward cycle. I expect leasing and sale activity to plateau this year, and the beginning of softening fundamentals (rental rates, cap rates, deal volume), partly in response to interest rate expansion and global economic uncertainty.
Q: What strategies are suggested to best navigate the retail opportunities and challenges you see?
A: As an investor, patience and dry powder to take advantage of opportunities that will present themselves in the new cycle. As a property owner, more focus on creditworthiness and staying power vs. getting the best economic deal.
For comments, questions or concerns, please contact Dennis Kaiser
