Retail

Chicago Market Experiences Surge in Retail Sales as COVID Restrictions Loosen

by Kristin Harlow July 8, 2021

By Chris Irwin, Colliers International As we begin to lower our masks, breathe fresh air and see smiles on everyone’s faces, there are strong signs that better than pre-COVID retail activity in Chicago is here. With the expanded vaccine rollout, a decrease in unemployment plus the added boost of stimulus checks, the surge in retail sales in the city and surrounding areas has been measurable. The demand for retail space increased in fourth-quarter 2020 and first-quarter 2021 significantly, with the first quarter recording a 650,000-square-foot increase in overall absorption, which pushed the trailing 12-month absorption back to positive territory — and its highest level since 2017. Increased leasing activity continued to drive new demand as net absorption totaled almost 1 million square feet in the first quarter. Vacancy in Chicago retail has flattened and currently is holding at 6.1 percent over the past year compared with a rate of 5.1 percent nationally. Leasing activity was driven by the expansion of essential retailers throughout the first quarter, similar to first-quarter activity levels registered in 2017, 2018 and 2019. However, the most important step toward recovery happened June 11 when the State of Illinois moved its Coronavirus response from Phase 4 to …

July 8, 2021

Development Market Reports Mixed-Use Northeast Northeast Market Reports Retail

Northeast Developers Push for Local Retail in Mixed-Use Projects

by Taylor Williams July 6, 2021

By Taylor Williams As consumers throughout the Northeast move closer to returning to their pre-pandemic lifestyles, unleashing pent-up demand on the retail, restaurant and entertainment sectors, owners of mixed-use properties are gaining a renewed appreciation for local concepts that create a special sense of identity. Of course, the inclusion of local uses and concepts in the larger overall retail tenant base is nothing new in the world of mixed-use development. And sources agree that having some marquee, national brands is also a critical ingredient in the recipe for a successful retail roster and experience. “High-quality retail creates places where people want to live and work, but unless you’re committed to doing a couple hundred thousand square feet, most of your retail component is going to be food and beverage (F&B),” says George Banks, founder of Revel, an Atlanta-based firm that provides food hall consulting services. “Everybody loves Shake Shack and Jeni’s [Splendid Ice Creams], but we advise our mixed-use clients to go as hyper-local as possible when it comes to F&B.” But in general, the COVID-19 pandemic hit local mom-and-pop operators, which often lacked the cash and credit to cover their revenue losses, much harder than their national counterparts. More …

July 6, 2021

Market Reports Retail Texas Texas Market Reports

Low Retail Inventory Sustains Sales Prices in Dallas, Austin

by Taylor Williams June 25, 2021

By Taylor Williams The combination of a flight by investors to highly targeted segments of the physical retail market and a lack of new development in 2020 is keeping prices high for select properties in some of Texas’ biggest markets. Retail investment sales brokers in Dallas and Austin say that for specific subtypes of well-located properties — such as single-tenant, net-leased (STNL) assets and multi-tenant strip centers with essential businesses — there simply aren’t enough of these deals being brought market to go around. These supply constraints ensure that pricing continues to rise and cap rates continue to compress for these in-demand assets. According to data provided by CoStar Group and Real Capital Analytics (RCA), Dallas-Fort Worth (DFW) was a top 10 market in 2020 in terms of average retail sales price growth. Although total transaction volume was, unsurprisingly, down for the year, the metroplex saw an average price of $396 per square foot for single-tenant retail assets, a year-over-year increase of 5 percent. The average sales price for multi-tenant retail properties rose 6 percent to $329 per square foot over the course of the year. The data from CoStar and RCA for Austin also illustrates more muted sales price …

June 25, 2021

Industrial Kansas Market Reports Midwest Midwest Market Reports Office Retail

Despite Pandemic, Wichita Market Experiences Significant Urban Development

by Kristin Harlow June 24, 2021

By Tom Johnson, NAI Martens The overall Wichita economy is not out of the woods yet, but numerous factors point to a continuation of the recovery from both the Great Recession and the impact of the pandemic. Since the significant employment downturn during the second quarter of 2020, the Wichita metro area has markedly recovered but remains well below 2019 non-farm employment. The seesaw unemployment rate has now declined to just over 5 percent. All employment sectors are expected to increase from 3 to 6 percent in 2021 with retail, leisure and hospitality leading the way as restaurants and travel return to pre-pandemic levels. In the background of all the pandemic noise have been significant gains in urban development with over $1 billion of public and private sector investment since the recession. ● Residential has grown exponentially with 21 new and renovated properties representing 1,228 units with some of the highest rental rates in the city. ● With over 100 restaurants and local shops, retail has increased significantly, adding almost 500,000 square feet, a 39 percent increase with more to come. ● Starting with the Ambassador Hotel renovation, the hospitality sector has added 375 rooms with another 95 rooms in …

June 24, 2021

Industrial Market Reports Midwest Midwest Market Reports Office Ohio Retail

Toledo, Ohio Market Shows Stability in Various Areas

by Kristin Harlow June 17, 2021

By Harlan Reichle, Reichle Klein Group As the Toledo, Ohio, area’s retail market proved to be stable and solid in the second half of 2020 and the industrial market continued a remarkable stretch of high performance since the Great Recession, 2020 was a tough year for the office market. However, all three property types have yet to register any negative COVID impact in our latest survey results. Retail Toledo’s retail market proved to be quite stable and solid during the second half of 2020. Given the fraught last year along with the headlines and travails of retail stores, gyms and restaurants, the general public might find this result surprising, but it was clear to our retail leasing brokers since mid-summer 2020 that transaction activity was snapping back fairly quickly after the initial shock of the spring 2020 lockdowns. Our year-end 2020 market survey found overall market vacancy down from both the end of 2019 and mid-year 2020. The decline in anchor vacancy more than offset a small increase among inline spaces as the market absorbed 39,183 square feet of space in the last six months of the year. It is a nearly exact repeat of the market’s performance in the …

June 17, 2021

Market Reports New York Northeast Northeast Market Reports Retail

New York City Must Be A Leader in Reimagining Retail in the Post-Pandemic World

by Taylor Williams June 15, 2021

By James Nelson, principal, head of Tri-State investment sales, Avison Young It probably won’t be a shock to learn that in the aftermath of COVID-19, we are going to need to reimagine retail. Even before the pandemic hit, retail vacancy was becoming more prevalent throughout New York City. Now more than ever, landlords and retailers are going to need to think outside the box to fill vacancies and allow retailers to survive. A recent survey among members of the International Council of Shopping Centers (ICSC), which consists of landlords, tenants and service providers, found that 57 percent of retail professionals believe that the economy will improve over the course of the next year. That being said, 73 percent wanted to see businesses open again in their state. A key question involves when we could expect to return to the in-person conventions and events that our industry is known for. ICSC is famous for its annual conference in Las Vegas that draws over 30,000 people. It’s a chance to catch up with friends and business contacts in a fun setting while also being able to accomplish dozens of meetings over a few days, as everyone is in the same place. Industry …

June 15, 2021

Industrial Market Reports Texas Texas Market Reports

RGV Industrial Market Maintains Steady Growth, Draws Investors’ Attention

by Taylor Williams June 11, 2021

By Daniel Galvan, SIOR, principal, Coldwell Banker Commercial RGV The Rio Grande Valley (RGV) industrial market continues to be very active despite a small, temporary slowdown due to the COVID-19 pandemic. With single-digit vacancy rates in both Hidalgo and Cameron counties, absorption is holding at a steady pace as available space has declined. To that point, the market saw approximately 250,000 square feet of net absorption in 2020. Rents have also continued to increase modestly with elevated demand, rising approximately 5 percent in the first quarter of 2021 relative to that period in 2020. However, that rate of growth should slow a bit in the coming months given that the market is still fraught with uncertainty due to COVID-19. Despite this uncertainty, we typically see upcoming vacancies continue to be filled prior to actually becoming vacant. While the agriculture industry continues to be a very large driver of absorption in the RGV’s industrial sector, there are more deals than ever for users that focus on consumer goods and fulfillment. There has also been a large amount of growth in demand from third-party logistics (3PL) companies and manufacturers. These users ultimately accounted for about 200,000 square feet of positive absorption in …

June 11, 2021

Features Retail

Green Rush: Cannabis Creates Opportunities for Retail Architects, Contractors

by Taylor Williams June 10, 2021

By Kristin Hiller The design and construction of cannabis dispensaries and cultivation facilities are generating lucrative business opportunities for architects and contractors as more states legalize recreational marijuana. Recreational use is now permissible in 17 states plus Washington, D.C. About 55 million, or 16.9 percent, of Americans currently use marijuana, according to the National Center for Drug Abuse Statistics. One contractor, Northbrook, Illinois-based Mosaic Construction, has created an entire division devoted to cannabis design-build services named Cannabis Facility Construction (CFC). “We continue to see the impact of the Green Rush in our pipeline,” states Andy Poticha, principal of CFC, which builds dispensaries, cultivation facilities and processing centers. “As the cannabis industry expands nationwide, it is headed toward a legal market worth $41.5 billion annually by 2025.” Cannabis accounts for approximately 65 percent of CFC’s total revenue and 47 percent of its project pipeline, according to Poticha. Virginia Maggiore, vice president of store planning for architecture firm RDC, says she has noticed an uptick in cannabis projects in the last two years, as a growing number of municipalities have begun awarding licenses or raising their number of licenses available. Long Beach, California-based RDC currently works with eight cannabis brands, each with …

June 10, 2021

Market Reports Retail Texas Texas Market Reports

RGV Retail Market Displays Creativity, Resourcefulness in Response to Pandemic

by Taylor Williams June 7, 2021

By Lupita Gutierrez-Garza, principal, and Christian Gutierrez, senior associate, Southern Commercial Real Estate Group The impacts of COVID-19 on the retail sector in the Rio Grande Valley (RGV) have mirrored those of the rest of the country. However, the way the region responded was different from the way it addressed past crises, such as natural disasters, and even very different from past responses to local problems like peso devaluations and drug cartel activity along the border. The response was multifaceted and included many trial-and-error situations. But through sheer determination and quick thinking by local leadership, regional landlords and tenants managed to mitigate all the uncertainty to not only survive, but to thrive. What made a difference in the region was the behind-the-scenes build-up of its economic infrastructure that has slowly been chipping away at the inequities the region has endured for years. Infrastructure build-up has been ongoing for over a decade and has come in many forms, including education and medical, industrial and logistics, aerospace technology and wind energy. All of these sectors managed well during the peak of the pandemic and continued to expand at phenomenal paces. Their growth has piqued a lot of outside interest and investment …

June 7, 2021

Market Reports Restaurant Retail Texas Texas Market Reports

Food & Beverage Industry Returns to Growth Mode in Houston

by Taylor Williams June 2, 2021

By Jason Baker, principal, Baker Katz At a time when commercial real estate professionals see promising COVID-19 metrics and a better-than-expected vaccine rollout as signs that the end of the pandemic is near, it’s natural to examine where some of the most interesting and encouraging signs of recovery are already popping up. Food and beverage (F&B) has certainly weathered the pandemic storm as well as any other retail sector. Understanding what comes next in F&B — what the next generation of successful concepts might look like and how the industry will likely evolve — begins with appreciating why the sector has remained relatively resilient during the pandemic. In telling that story, we can start to get a sense of what’s next for F&B concepts and real estate strategies, both in the Houston market and across the country. F&B Ascends It’s not surprising that F&B is having a moment. It was the hottest commercial real estate category before the pandemic, and it remains the most consistent industry bright spot today, though industrial players might disagree. Demand remained high throughout the pandemic, especially for quick-service and fast-casual concepts. A handful of newer players were hit hard early during the COVID-19 outbreak, but …

June 2, 2021

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