A Retail Resurgence
CB Richard Ellis (CBRE) recently released its second annual Shop Talk: A Retailer’s Perspective, the results of a survey that was conducted during June and July of this year. Of the approximately 200 participating retailers, 58% were national, 26% were global, 15% were regional, and 1% was local. All major retail categories were included, and the full range of real estate types were covered, including urban, power and lifestyle centers, and all types of malls.
Among the many salient points the report makes is the rise in the available retail space. Several factors are cited as the major contributors to this situation.
– Weaker shopping centers in secondary and tertiary markets have been hard hit by the closure of their big anchor stores in recent years. Adding to the mall woes is that many of the smaller tenants have clauses that allow them to break their leases if the anchor store remains vacant for an extended period of time.
– Secondly, in areas that had experienced the residential real estate boom five or ten years ago, primarily in the so-called Sun Belt, the developers overbuilt strip malls, many of which were never fully tenanted or which now sit only partially filled. Limited credit availability in these markets continues to dampen the ability of small retailers to move into these spaces.
– Thirdly, the Internet and its 24/7 availability is increasing its market share of the U.S. consumer dollar. As a result, many traditional bricks-and-mortar retailers are shelving plans to expand physically and instead are opting to invest in new websites, e-commerce technology, and apps that allow their customers to shop whenever and wherever they happen to be.
Despite these negative pressures, most of the companies surveyed by CBRE are optimistic about the economy in general. Although only 27% think it’s improving, 45% believe it’s stable while only 17% think it’s weakening. A solid reflection of this optimism is that 92% report plans to expand the number of their store locations (compared to 82% from last year). Fueling their plans are improved balance sheets, the closure of underperforming stores, and in some cases, downsizing the store footprint.
Another telling factor is that 94% of them were able to negotiate tenant improvements with their landlords last year, and 59% said they’ll be opening more stores because of lower rental rates.
In addition to covering the entire retail and foodservice industries for 75 years at the headquarter, Chain Store Guide also maintains a database of nearly 630,000 individual locations for every major retailer and restaurant operator in the U.S. This database is updated continually, and our customers can not only identify companies that are growing but also those that are downsizing. Want to know where all the closed Blockbuster locations are? How about all the Borders Superstores that just went dark? We have them, geo-coded to the rooftop.
Leading Chain Tenants is available in print directory, Lite, Pro, and Plus database formats. To schedule an online demonstration call 1-800-778-9794 today.
Linda Helman, Senior Editor
Linda has worked at Chain Store Guide for twelve years. Prior to that, Linda worked as a research economist for the federal government, as an analyst for a management consulting firm and as a freelance writer. Please contact her if you have questions or comments.