The rapidly growing trend for online buying of "commodity" type products has been accelerated by the COVID-19 crisis. Many consumers that may have been resistant to e-commerce shopping prior to the pandemic have come to appreciate the ease and safety of ordering on their device, convenience of delivery, and competitive product prices. 

Despite this sea change in customer behavior, as of 2018, the United States' retail footprint was approximately 24 square feet per capita, as compared to four square feet in Western Europe. What does this mean for the future of retail space in an age where brick and mortar sales are generally declining? Most industry participants are convinced that the U.S. retail footprint needs to shrink, and that adaptive reuse of excess space will be part of the solution. 

While the U.S. suffers from an oversupply of retail, the country is simultaneously experiencing a housing shortage, particularly in coastal markets where most of the population growth has been concentrated for decades. Earlier this year, Freddie Mac published a study suggesting that the nation has a shortage of approximately 2.5 million units. Further, if the housing oversupply in rust belt states is removed from the analysis, the housing shortage becomes even more acute with a deficit of approximately 3.3 million units. As a result, some apartment developers are beginning to search for retail sites that can be repurposed for medium to high density residential uses with a ground floor, necessity-oriented shopping component. However, these densification strategies only make economic sense in urban environments where high multifamily rents justify the cost to "go vertical." Secondary and tertiary retail locations and markets will require alternative creative solutions to regain productivity and functionality.