LAS VEGAS-Not all retail boats are rising equally in this rebound. In this exclusive interview from RECon, two executives from Transwestern—Patrick Owens, who covers the Chicago retail market, and Rick Rizzuto, who covers New Jersey and New York—look at the troubles and successes each of their respective markets have experienced.

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GlobeSt.com: Describe the markets you represent against the backdrop of the national retail picture.

Patrick Owens: We're in the middle of the pack in terms of recovery. We're seeing some good absorption from the grocery players that are extremely active in our market. The markets that performed well in the recession continue to perform well, and those that underperformed continue to underperform. We're seeing a big flight back to the urban core.

Rick Rizzuto: It's pretty interesting that New York, itself, is an anomaly. As much of a recession as there was, New York really didn't suffer as much as other parts of the country. New Jersey certainly did, experiencing a lot of vacancies, especially big-box vacancies but we powered through it and now all is on the upswing.  Especially in markets like Morristown, NJ—one of the HOTTEST in the State right now. Now the franchise driven concepts 

GlobeSt.com: Which market sectors are performing the best?

Rizzuto: In the New Jersey market, downtown central business districts are doing the best. A lot of redevelopment is happening and a lot of mixed-use projects are going on.  If you're a retailer, restaurateur, and/or franchisee of almost any kind – take a look at a few downtowns like Morristown, Somerville, Westfield, etc and consider becoming a part of the action. 

In New York, the Times Square market is really heating up, as well as the Bleecker and Soho trade areas, which have typically been “sleeper markets” reserved for visionary luxury brands who understand them like Daniel Cremieux, Ralph Lauren, Anthropologie, and others.

Owens: It's similar in Chicago. The central business district in the Loop is at historically low vacancy rates. And the High Street markets like Michigan Avenue have seen rents reach new levels. In the suburban markets, we're seeing development driven by grocery tenants. Multiple grocers are expanding in Chicago at this time. Small-shop retail is being pushed by restaurants as well as the mattress retailers, which are taking quite a bit of space.

GlobeSt.com: What is the impact of online shopping in your area?

Owens: I think that's more of a national discussion than a market-by-market discussion, but everybody's paying attention to it and store size is being affected. I don't think anyone has truly figured out what size they want to be. It continues to change daily as they see sales shift from stores to digital.

Rizzuto: We're seeing a lot of the same thing. Most retailers are taking smaller spaces instead of what they used to do, which was take more space than they needed and grow into it. Now they're doing more online and establishing smaller stores featuring iPad stations and just a couple of products to touch and feel. They're definitely buying into online sales. Amazon even took 1,000,000 SF of space in NJ fairly recently to service the demand for online shopping and convenience.

GlobeSt.com: What's the outlook?

Rizzuto: In our markets things are going to continue to grow into 2015. Retailers are going to continue to expand in the 2,000-to 5,000-foot range in NJ, but the big boxes will continue to struggle a bit. The grocery-anchored centers will always do okay because they're necessity brands, as long as the smaller retailers remember the value and traffic that a grocery anchor typically brings. NY will continue to be as strong as ever with both new and established retailers trying to find the most high profile spaces for “the best price”—which can be a relative term given how NYC itself operates.  We're on a good path.

Owens: I think the next six months will be interesting for us, determining what happens with the office supply sector. We're seeing store closures from Staples, Office Depot and Office Max in the wake of the merger in that segment. We're excited to see new development with the grocery players that are coming to Chicago, and I think we'll continue to see the small-shop restaurant and service side lead development.