The real estate landscape has changed considerably over the past few years and while we at Buxton can see what retailers are doing to make changes in the future, we sat down with Chain Store Age’s real estate reporter, Katherine Field, to get her view on the current commercial real estate climate. Katherine has covered retail real estate for Chain Store Age for the past six years, and covered retail since the late 1980’s. Katherine has a broadcast journalism degree from LSU.
BUXTON: How would you describe the state of commercial real estate right now?
KATHERINE FIELD: Obviously it’s still struggling, but we’re seeing a turn for the better. During ICSC New York (December 2010) the shopping center developers absolutely told me they were making deals. Retailers are starting to discuss expansion rather than contractions. I really think a corner being turned. All of us in retail real estate expect positive movement being made in 2011, and want to significant strides in 2012.
BUXTON: Talk about specific retail segments.
FIELD: Interesting recent shifts, dollar stores initially moved to the forefront. Never had they seen so much positive growth. Luxury just fizzled in the recession, but that is a category that we’re seeing some of the greatest positive movement. There really is pent-up demand, and consumers are finally spending more on luxury goods. Which is good news.
BUXTON: Are there specific concepts you think we should watch?
FIELD: Perfumania is embarking on major growth right now. TCBY – I covered them in our February issue - we expect to see a lot happening from them. Charming Charlie is growing aggressively. They are a smart retailer; they have the right price point for a range of customers and have been as recession-proof as any business out there.
BUXTON: What are you seeing in terms of shopping centers and hearing from developers?
FIELD: The lifestyle center, that traditionally features up-scale retail, has struggled. And the Power Centers (the big box anchored open air center featuring the major boxes) are really struggling because there are a lot of vacancies in those big boxes.
Developers are going back to the drawing board and asking themselves “How can we make this center viable once again?”
We’re seeing office going in, and a huge rise in developments that feature residential. There has also been success with traditional malls bringing in a non-traditional retailer, like Whole Foods, in as anchors. With a non-traditional anchor, the consumer is really going to benefit by the developers having to think outside the box to create a convenience center.
PREIT (Pennsylvania Real Estate Investment Trust) has a development called Plymouth Meeting MallM that is a great project. It’s a huge redevelopment and now features Whole Foods. Will evaluate assets and look for that opportunity to bring in grocers and other market concepts to revive centers.
BUXTON: What are you looking forward to seeing at ICSC RECon in May?
FIELD: I’m going to be looking for ground up development. I’m not expecting a lot, but I expect to see a lot of emphasis on outlet centers. I want to see some retailers actually unveiling expansion plans. They don’t have to be aggressive, just want to hear more talk of expansion. Less talk of contraction.
Have additional questions for Katherine? Post them here.