Retail real estate has been the most innovative form of real estate through the years, evolving to meet changing consumer tastes and trends. Concepts are tried and modified. Stores open, are upsized, downsized, right-sized, and closed. There's a certain creative destruction that has only accelerated over the past several years, particularly with the added element of internet sales which creates both competition and opportunity for retailers.
This accelerated change has made it more challenging for landlords to adjust; there's a tension between the needs of retailers based on the pace of change and the permanence of physical properties. This has helped create a bifurcated market with newer centers that are the right size in the right location with the right amenities generally full and older centers that are too deep or configured wrong or in areas the market has moved away from having significant vacancy.
All of which raises the question of what the retail of the future will look like. Not surprisingly, we expect it to be focused more on the mix of concepts than buildings. Successful retail is about the real estate, but more about catching consumers' attention. Retail will reflect the more eclectic shopping patterns of today's shoppers. A portion of which focuses on daily needs, perhaps none more basic than having a specialty grocer anchor. Value continues to be in demand, so expect off-price retailers. But, also expect a full price boutique/fashion component. Add an entertainment component and a restaurant mix that touches morning, lunch and dinner and you have the modern shopping center. A co-mingling of price points and concepts are not frequently seen with lots of potential variations and sizes. Welcome to the shopping center of the future.