Location, location, location
Ian Ritter of GlobeSt.com sat down recently with Madison Marquette’s Senior Vice President, Thomas Gilmore at the International Council of Shopping Centers (ICSC) RECon who to discuss current trends in commercial real estate in the video above.
Gilmore said that currently, their focus is trending toward redevelopment projects across the nation and said retailers are not having trouble adjusting to the need to redevelop because it’s the age old mantra of “location, location, location” still rings true and most redevelopment projects are actually less risky than traditional development because it occurs in established areas with existing traffic and awareness.
Trend: independent niche retailers
There is currently a reemergence of smaller independent niche retail operators with operating history in inline spaces as retailers are growing vertically as they are now focusing on niche products. Gilmore points to denim bars as an example of how one retailers are offering a very specific product rather than all products in their industry. Gilmore noted that he is seeing more interactive concepts in retail and that Apple is “most engaging retail store I think you can find.”
On the “other end of spectrum” from Apple is Bass Pro Shops but they perform well because they know their customers well (a trend Gilmore repeated throughout the interview) which offers an experience and is an “engaging and entertaining environment.”
We have found that what Apple and Bass Pro Shops also have in common that smaller retails find it desirable to be nearby not just because of traffic but because both are well known for their research prior to purchase, meaning the smaller retails already know the general target demographic and don’t have to invest as much as they enter the market.
Trend: entertainment concepts
Interestingly, Gilmore said that niche entertainment concepts are currently emerging but warns that they often come with risk and that developers should look to the entertainment concepts that have a good track record and are profitable in their niche, pointing to Lucky Strike Lanes as a good example.
The commercial sector has changed dramatically in the last decade and is currently trending toward redevelopment which is not only less risky but Gilmore indicates is well suited for the other trend which is independent niche retailers. The big box era isn’t dead, but most cities have empty anchor stores with blacked out windows like Borders. While the rest world waits for a recovery, retailers are moving forward with new and innovative concepts and commercial developers like Madison Marquette are already on the ball.