What does the future hold for retail real estate in America?
Things are changing. The way businesses operate is changing. Our shopping habits are changing. The need for different types of real estate is changing. While we will definitely need more of certain types of property in the near future, there just won’t be as much demand for many properties in the way they have been configured for use up until now.
The Great Retail Apocalypse
2017 set the record for retail store closures. At least 6,700 stores were slated for closure between January and October alone. That’s hundreds more than in the pit of the crisis in 2008. These numbers aren’t just for small mom and pop stores either. These are major national credit tenants and famous brands like Macy’s, Rite Aid, and Michael Kors—as well as tech savvy chains like Gamestop. A few may be consolidating branches in order to optimize business or as the result of acquisitions and mergers. Still, hundreds are the result of major retail companies going bankrupt.
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Some may have even noticed Starbucks locations closing in their neighborhoods. That is an unusual trend. In fact, the retail apocalypse has gotten so bad that one mall operator has sued Starbucks to keep some of its Teavana locations open. Starbucks planned to completely shut down all it its stores under this brand by the end of 2017. A judge sided with one property manager who feared the store closing would wreck its assets by triggering a domino affect among other stores in its malls.
What About Amazon?
Amazon recently made a very high profile acquisition of Whole Foods. While this was partially a play into the grocery business, it was also a big real estate move. It gives Amazon already operating distribution centers across the country from which it can ship all of its wares.
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