As online shopping continues to grow, it’s impact on big-box retail spaces is also growing. Investors in retail properties need to keep their eyes on the trends and understand options for filling vacated spaces as well as the ongoing effects of Amazon and other online shopping venues. For a thorough look at the issues, consider this article:
How Box Retail Is Adapting to the Amazon Effect
CORONA DEL MAR, CA-Amazon has shown the retail world that today’s consumers are turning to the convenience of online shopping, but in some cases, consumers still prefer traditional brick-and-mortar stores as long as the shopping experience is easily accessible.
A recent UBS report says that e-commerce accounts for 16 percent of total retail sales; in 2004, it was 8 percent. And the average household spent $1,500 more online last year (for a total of $4,600) than it did just five years ago. CNBC reported that more than 70 million square feet of retail space is expected to close in 2018, primarily due to stores occupying large footprints closing their doors. This leaves landlords with space to fill, and they are getting creative and finding new options.
Retail landlords have been relying on discount retailers (e.g., Ross and TJX) as popular replacement options; however, it takes multiple tenants to fill a large big-box space, [Bill] Asher [EVP of Hanley Investing Group] notes…. Owners are endeavoring to best determine which tenants will back-fill big-box spaces and how that will affect their future disposition values. Discount, internet-resistant, service-based or food-related tenants (or tenants that have those characteristics) have become the most popular investment types for investors as well as viable vacancy replacements in today’s market.
This is an excellent time to invest in commercial real estate Eugene, and understanding the larger retail trends is a part of achieving success. The professionals at Pacwest Commercial Real Estate are experts in commercial property. We’re ready to help you find the right property to meet your investment goals, and to guide you through the process. You can reach us at 541-912-6583.
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