The Wilmington Metro Area Retail Market report is showing increased leasing, increased rental rates on average and increased demand with a shortage of smaller commercial spaces readily available for lease. With new planned shopping centers in the works the demand for space should keep up with the development of space.
We have the renovations at the mall, but the relocation of existing in place retailers will create a market gap as existing stores close to relocate, creating some new opportunity long term, with short term dark spaces. (KMART ???)
There are some concerning national trends for the Retail Market Place as larger boxes are struggling to compete with online sales. The recent supreme court ruling should take that into account with their change to allow for taxation of online sales by states, it now makes brick and mortar stores have a equal playing field with the digital.
Tenant Mix, and the reduction of restrictive covenants long sought by retailers to protect themselves are now showing that cross sales and cotenancy with competitors may be better for future business. By creating an environment where shoppers dont have to drive everywhere else to go to the stores they want, you create a collaborative shopping experience.
Another interesting Market Tidbit affecting Landlords is the corporate companies policy to allow stores to accept returns purchased digitally. The head of Simon Properties group discussed this at a recent panel event. The major take away from that panel is that due to retailers allowing online purchases to be returned at Brick and Mortar locations, it hurts that individual stores performance as it shows a net cash flow back to the customer and affects/effects percentage rental clauses.
YIKES! Its amazing how a simple concept can ripple into broader implications for commercial real estate.
Meanwhile the investment side of Retail real estate remains steady with the NNN Tenants leading the way in investment sales and acquisitions at lower to mid range caps.
Check out these articles for Local and National Retail News for interesting reads and information:
Check out the Wilmington Market Reports