Top Trends Shifting Retail in Commercial Real Estate

Written by Saunders Seismic on 9th May 2024

The forecast for retail in commercial real estate is undergoing significant shifts, influenced by various factors and trends. Retail Commercial Real Estate will surely be top of mind at the upcoming ICSC Las Vegas conference. ICSC Las Vegas is the largest commercial real estate conference every year, getting top professionals, dealmakers, and innovators worldwide together to elevate and shape the retail marketplace.

The outlook is unpredictably positive; even Mike Sladich, Regional Managing Director at Northmarq, recently noted that distressed opportunities in the market have not materialized as anticipated, contrary to expectations.

Top Retail Trends

The retail landscape is evolving rapidly, shaped by emerging technologies, shifting consumer preferences, and innovative real estate strategies. Staying ahead of these trends is essential for retailers and landlords looking to remain competitive in a dynamic market.

Below are some key trends redefining retail in commercial real estate today.

Ecommerce Impact

The continued rise of e-commerce has reshaped retail dynamics, increasing competition for traditional brick-and-mortar stores. Many retailers are adopting omnichannel strategies, blending online and offline experiences to cater to changing consumer preferences.

Adaptation and Innovation

Successful retail spaces are evolving to offer unique experiences that cannot be replicated online. This includes experiential retail, curated pop-up shops, interactive displays, and immersive environments that deeply engage customers.

Focus on Convenience

Convenience has become a primary driver for retail success. This includes location accessibility, streamlined checkout processes, click-and-collect options, and efficient delivery services. Retailers and landlords are collaborating to create seamless customer journeys.

Mixed-Use Developments

Many developers are integrating retail spaces into mixed-use developments that include residential, office, entertainment, and dining components. This strategy enhances foot traffic, creates synergies between sectors, and fosters vibrant community hubs.

Health and Wellness

The pandemic has heightened awareness of health and wellness, influencing retail trends. There is a growing demand for fitness centers, health-focused stores, organic food markets, and wellness services within retail spaces. Landlords are adapting to accommodate these preferences.

Sustainability

Environmentally conscious consumers are driving demand for sustainable and eco-friendly retail options. To appeal to this demographic, retailers and landlords are incorporating green building practices, energy-efficient technologies, recycling initiatives, and sustainable sourcing into their operations.

Flexibility and Agility

Flexibility is key in navigating retail real estate trends. Landlords are offering flexible lease terms, adaptable spaces, and tenant improvement allowances to accommodate evolving retail concepts and emerging brands. This agility enables retailers to test new ideas and respond quickly to market changes.

Data-Driven Insights

Retailers and landlords leverage data analytics and technology to gain insights into consumer behavior, preferences, and trends. This data-driven approach helps optimize marketing strategies, inventory management, space utilization, and customer experiences.

Artificial Intelligence

Finally, according to Globest, Mark Sigal, CEO of Datex Property Solutions, pointed to another trend with transformative potential: AI, or artificial intelligence. “With various facets of portfolio management, including leasing, property management, facilities management, asset management, and investment management, generating substantial amounts of data, AI is poised to streamline processes, he says.

By optimizing strategies, coordinating stakeholder actions, and monitoring critical events, AI promises to reshape the industry, ultimately leading to enhanced retail experiences.”

Adapting Retail Real Estate for Success and Safety

While the retail sector faces challenges, there are opportunities for innovation, adaptation, and growth. Successful retail in commercial real estate will continue to evolve by embracing technology, customer-centric strategies, sustainability practices, and collaborative partnerships that enhance value for all stakeholders.

We encourage all sectors of commercial real estate, including retail, industrial, office, multi-family, self-storage, hospitality, etc., to perform bi-annual property inspections to ensure buildings are in good structural condition.

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