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Has the Control Shifted to Tech Savvy Brands?

Capitalizing on diminishing lease rates, smart money is repositioning archaic retail concepts as new cultural anchors.

Viktor Simco, a former professional athlete turned commercial real estate agent at Commercial Brokers International.

LOS ANGELES—What were once shopping mall anchors have now decayed to nothing more than antiquated big box shells. Retail behemoths like Toys “R” US and Payless ShoeSource have already filed for Chapter 11 bankruptcy protection, with Payless closing over 400 stores. JCPenney shut its doors to 138 stores in 2017 with Macy’s, Kmart, and Sears not far behind. Credit Suisse released a report stating 25% of shopping centers in America are going to shut down in the next five years. Let’s not forget, according to the Bureau of Labor Statistics, one in 10 Americans work in the retail sector. These brick and mortar store closures could result in up to one billion square feet of empty retail space across the nation, which means the same landlords who used to hold all the power are now scrambling to fill these vacancies.

Coming into Q2, control has shifted to the tech savvy brands in pursuit of retail, capitalizing on these diminishing lease rates. The smart money is repositioning archaic retail concepts as new cultural anchors. We are seeing e-tailers like Amazon, Zappos, Google, Warby Parker, Bonobos, and Lesara use the agile retail business model (i.e. big data) to track consumer metrics. They are then using those analytics to calculatively open physical locations near their last mile distribution facilities in order to reach their customer more efficiently and cost effectively. With time being the new currency, companies are creatively offering personalized interactions (perhaps a second of “ah ha”).

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Natalie Dolce

Natalie Dolce

Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.

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