Commercial Investment Real Estate September/October 2013 - Page 38

Shopping Center Net
Operating Income
Percentage change from previous year
15
Neighborhood centers
Community centers
10
Power centers
Regional malls
5
-0
-5
-10
-15
2010
2011
2012
Source: National Council of Real Estate Investment Fiduciaries
Rentz: My clients are looking for quality real estate with no weak-
nesses. It is more important than ever that the site has all the funda-
mentals that make for a successful retail site: visibility, accessibility,
parking, and favorable demographics.
CIRE: What’s next on the horizon for the
retail real estate sector?
Rentz: Retailers will continue to reduce their square footage into
smaller, more ef cient footprints. Traditional retailers will continue
to perfect and grow their online presence, while the e-tailers will
attempt to f ne-tune their brick-and-mortar locations to perfect a
one-day delivery strategy. T e survivors and thrivers will have a
great geographic footprint of stores as well as of er a great online
experience.
Yetter: Customer-f rst service is the key. T e auto-services industry
has traditionally focused on upselling customers, thus creating a
lack of trust among consumers. We are focused on combating that
perception by delivering the highest level of service and focusing on
the individual customer’s car needs. As in most industries, the level
of service and the customer experience continue to become more
important as customers evaluate their growing purchase options.
Massey: It is all about the customer experience. Many retailers and
restaurants fail to recognize that the customer’s needs and wants
come f rst. T e retail customer today wants it all from omni-channel
retailing to being wowed with their in-store experience. T is might
be classif ed as the “Apple ef ect” that many retailers are trying to
replicate. T ose who not adopt these two pillars in the future will
disappear from the retail landscape.
Glickman: Most retailers are shif ing focus and heavily investing
in their omni-channel platforms, information technology, logistics,
and same- or next-day delivery. By doing so, retailers like Target,
Macy’s, Nordstrom, Walgreens, T e Gap, Of ce Max/Of ce Depot,
Walmart, and many others are positioning themselves to compete
in the digital world.
Jennifer Norbut is senior editor of Commercial Investment Real Estate.
WHAT’S NEXT? 7 RETAIL TRENDS TO WATCH
1. The Internet’s Other Impact. Online sales are not only impacting the retail sector, but the Internet is creating more
informed consumers. Well-educated shoppers are causing pressure on retail margins, which translates into pressure by
tenants to lower rent.
2. More Sales, Less Space. The wide range of available technology offers retailers more effi cient inventory control
and space needs. They are applying the 80/20 rule – 20 percent of their SKUs generate most of their sales and gross
margin. The result: Retailers can generate more sales per square foot in less space causing store formats to shrink.
3. Bigger Players Dominate. The supermarket sector is being consumed by dominant players with larger stores.
4. National Anchors. In large shopping centers, national credit-tenant anchors are winning out over same-category
regional and local tenants.
5. Big-Box Woes. Large vacant boxes are becoming increasingly more diffi cult to re-tenant.
6. Exclusive Use. Second-generation retail space is being increasingly impacted by exclusive-use lease provisions.
7. Service Tenants Triumph. Landlords are making greater use of service tenants to maintain occupancy. A recent
study revealed that service tenants comprised less than 15 percent of total occupancy 10 years ago versus almost 25
percent today.
Gary M. Ralston, CCIM, CPM, SIOR, is managing partner of Coldwell Banker Commercial Saunders Ralston Dantzler Realty LLC in
Lakeland, Fla. Contact him at [e-mail].
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September | October | 2013
Commercial Investment Real Estate