As published on GlobeSt.com, June 7, 2017
TUSTIN, CA—The fundamentals of great retail brokerage continue to stand true, but sometimes the location is just not right for retail, and in these situations sometimes it’s best to evaluate a completely different course, Coreland Cos.’ VP of retail brokerage Ben Terry tells GlobeSt.com. We spoke with Terry about the state of leasing neighborhood shopping centers, taking advantage of unused parking fields and the importance of centers having an urban feel.
GlobeSt.com: What is your general overview of the state of leasing neighborhood shopping centers?
Terry: The fundamentals of great retail brokerage continue to stand true: it’s all about location, location, location. Class-A products remain the jewel of the market, but opportunities lie in B and C assets.
Sometimes the location is just not right for retail, and in these situations sometimes it’s best to evaluate a completely different course. This might mean recreating space into something other than retail, converting an unused parcel, or making new use of an unused parking field. In my opinion, Southern California parking fields are a gold mine of opportunity for future development.
GlobeSt.com: How can retail owners take better advantage of parking fields, especially with today’s changing parking needs?
Terry: The next decade, complete with driverless cars and drone delivery, is going to transform the way we look at parking fields that surround retail. Rather than having to accommodate for five per 1,000 square feet parking-stall ratios, retail parking will be about ease-of-access and drop-off points.
The excess land presents so many opportunities to enhance the retail environment, but adding more retail space may not always be the value add. The additional land might give an owner the flexibility to enhance the experience—anything from adding outdoor entertainment and dining areas to selling off parcels for multifamily or hotel development.
GlobeSt.com: Will the next generation of shopping center space always have a more urban feel, especially with these advancements?
Terry: Yes, I definitely think it’s about introducing an urban feel to our suburban locations. Next-gen families may not want to live downtown, but they do want to live near places they can eat, shop, go to the movies and take advantage of other amenities.
Multifamily or hotel added to a retail development just makes sense if well thought out. Success of a retail destination has always been dependent on the residential and thriving retail neighborhood surrounding it. Our reliance on Uber, Lyft and eventually driverless cars reinforces the need to keep our home, social and active life closely connected.
GlobeSt.com: Does this mean that retail opportunities will continue to diminish?
Terry: Absolutely not. So much of the media’s industry talk for the past year has been based on diminishing retail and the negativity surrounding retailers such as Macy’s, JCPenney and Sears. In reality, there is so much optimism regarding new opportunities. RECon was buzzing with talk about how to create value in our existing centers and focused on the retailers that are thriving: restaurants, services, health and fitness.
So what if we no longer like buying some soft goods in store? We are enjoying eating out more than ever. The retail experience is evolving, and we can either choose to keep up with it and fuel its reinvention or sit back and lament what once was.
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