If your community is trying to attract new retail development or retain existing retailers, it’s important to understand the challenges and opportunities facing these businesses. That’s not always easy given the industry’s rapid rate of change, which often affects site location decisions.
Each year, Buxton publishes an annual Retail Real Estate Outlook that provides updates on the state of the retail real estate market, important trends that are affecting real estate strategy, and markets that are attracting a lot of new development. While this report is written from a retailer’s perspective, it offers helpful insights for communities who want to stay on top of the latest trends.
Below, we highlight three facts about today’s retail real estate market and explain how your community can respond.
Real Estate Prices are Rising
With demand for retail real estate outpacing supply, prices are rising and retailers are having to spend more on each new site.
How to Respond: It’s more important than ever for communities to prove that their proposed site is a good investment for a retailer. Selecting new sites is an important financial decision, so retailers need to be confident that a site has the right types of customers, area draw, and proximity to competitors. Do your research and be ready to present prospective retailers with data-backed proof of your site’s potential.
Small Box Retail = Big Opportunities
In today’s market, small box retail space is a hot commodity. Big box retail is a tougher sell.
How to Respond: Have vacant big box retail space? Consider working with real estate owners to divide it into smaller, more marketable spaces. If you are preparing new sites for development, be sure to include smaller parcels that give retailers the chance to enter the market without as much risk.
It’s All About Experience
Retailers want to be in locations that foster an inviting customer experience. This enables them to offer something their online competitors cannot – a reason to visit and linger – and taps into the trend of consumers spending more on experiences.
How to Respond: Consider pursuing mixed-use development opportunities that emphasize community gathering places. For communities with older buildings, redevelopment programs may attract retailers seeking a unique aesthetic.
To learn more about retail real estate trends and how your community can respond, register to attend the live webinar “A City’s Guide to 2017 Retail Real Estate Trends” hosted by ICMA on February 22, 2017. The webinar will feature speakers from Buxton and the City of Moberly, MO.