EAST RUTHERFORD, NJ-The times they are a' changing, which is not exactly hot news in the real estate world. But Cushman & Wakefield's Gary Gabriel sends up this very pointed hue and cry: “We are about to witness a revolution in the retail sector.”
Gabriel, who is one of the featured panelists at the RealShare New Jersey Breakfast seminar on April 10 in Newark, says the face of successful shopping centers is in the midst of radical change.
“We are seeing the former must-have tenants evolve into watch-list tenants – or disappearing. We are seeing previous watch-list tenants turn into must-haves,” he tells GlobeSt.com.
Back in the '90s, Gabriel says, “If a shopping center had a restaurant or a gym as a tenant, that was a sign of a center in trouble. Investors were reluctant to look at it. All of a sudden now, a gym with large number of members is seen as an asset. Within the last five years, restaurants have become a significant must-have.”
He proffered the example of the Clifton Commons shopping center on Route 3 in Clifton. “Initially, this was considered to be a challenged project,” Gabriel says. “Today, there is an LA Fitness, a ton of restaurants, along with the traditional shops – and they keep it rented up very nicely.”
Gabriel is an investment specialist with C & W's Metropolitan Area Capital Markets Group. He says investors are still mainly focused on acquiring grocery-anchored properties.
Soon, however, he says investors will have to begin looking at the market differently, based on how people will shop in an increasingly e-commerce-oriented world. “As the Internet chips into sales of hard goods at traditional grocery stores, this category will face challenges,” Gabriel notes
Already, non-traditional tenants such as gyms, restaurants, medical offices, veterinarians, and other service-oriented businesses are gaining favor, simply because they draw continuous pedestrian traffic, he says.
A bit of the advice he will dole out at the RealShare session: “Smart investors should be trying to get their arms around how e-commerce, traditional retail and consumer shopping patterns will intersect moving forward. This could result in an interesting shift in demand for today's second-tier assets.”
Gabriel will also discuss the following issues at RealShare in Newark:
- How do we make sense of opportunities in the New Jersey office market? Why would anyone invest in suburban office, given the challenging fundamentals? Where are the opportunities?
- Why is there a huge supply/demand imbalance for the industrial market, between opportunities and investor capital? How does one make a successful buy in New Jersey today?
Sign up for the Real Share session here:
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