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It’s no secret that e-comm dominated in 2020. But retailers know there’s still a lot of value in brick and mortar, and there’s space to be gobbled up—for now.
Get it while it lasts: The market is showing a lot of movement, according to two experts Retail Brew spoke with. Here’s the breakdown of retail vacancy rates in Q1 2021 versus Q1 2020 in major US markets, per CBRE:
- Chicago: 11%, 12%
- Dallas: 11%, 9%
- New York: 10%, 8%
- Austin: 8%, 7%
- Boston: 8%, 8%
- Washington, DC: 8%, 7%
- Los Angeles: 8%, 7%
- San Francisco: 7%, 5%
Retailers are racing to grab IRL space, and for good reason: 43% of respondents to a Retail Brew/Harris Poll survey in March said they’ll mostly shop in-person post-pandemic. Less than a quarter (24%) said the same about shopping online.
Many of these retailers are e-commerce players opening up stores for the first time, Lance Marine, SVP of retail services at CBRE, told us.
- “I can't tell you how many of the concepts we deal with are doubling down on their brick and mortar strategy once they bested the infrastructure and backbone of the e-commerce platform,” he said.
- 3,300+ stores are expected to open in the US this year, according to Coresight Research.
Mix it up: More than ever, landlords want to diversify their retail tenants, and are shifting more toward restaurants and showroom concepts, Anjee Solanki, national director of retail services at Colliers, told us.
- “A lot of this has to do with cities starting to say we need to start moving these opportunities forward to enhance that location, community, and/or market.”
The markets seeing more retail activity, according to Solanki, include Florida; Nashville, Tennessee; San Diego; and the Seattle suburbs.
Looking ahead: Marine and Solanki both expect the retail space race to heat up even more once offices reopen across the country.
- “It's competitive because you're seeing certain brands that are expanding very, very quickly,” Solanki said. “You're also seeing new emerging concepts growing in the non-traditional kind of retail space”—KM