Urban and suburban fundamentals used to be closely correlated, but that is no longer the case, comments Coreland’s Matt Hammond.
By Richard Berger | July 17, 2023 | As published by GlobeSt.com
With workers only venturing into the office a few days a week, it’s no surprise that spending is being re-directed to retail districts closer to where people live, according to a new report from CBRE.
This has resulted in an uptick in CBD retail availability in US central business districts, which now exceeds that of suburban space for the first time since 2006.
Suburban availability has fallen, according to the report, upending a well-established pre-pandemic trend whereby urban and suburban fundamentals were closely correlated, the report said.
Analysis of consumer data from Placer.ai suggests that urban and suburban malls can continue to coexist as they recover from the effect the Covid pandemic had on shopping patterns.
“Foot traffic data indicates that there is plenty of room in the retail space for both types of venues,” according to that report.
Still, Matt Hammond, Partner / SVP Brokerage, Coreland Companies, tells GlobeSt.com that downtown environments have faced a variety of post-pandemic challenges significantly affecting CBD shopping patterns.
“Retailers and restaurants need daytime and nighttime traffic,” Hammond said. “They depend on employees going out to lunch, as well as professionals living in the area to enjoy evening dining, events, and shopping.
“This flight from CBDs, as well as ongoing security concerns in prominent areas, has deterred retailers and restaurants from expanding. There was a time when downtown had the best new restaurants and most unique environments, but this is no longer the case.”
For the past decade, opportunistic owners of suburban centers have invested in experiences and creating destinations, he said.
“Elevated design with a larger focus on outdoor dining areas, community art, and gathering spaces. Recognizing that restaurants can be a significant draw, they often have a distinctive design and are often centrally positioned or clustered to create synergy.”
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