After a tumultuous year-plus, we can now glean useful lessons and insight for more successful strategies in retail leasing during a pandemic. The primary data driving these conclusions are actual gross sales from different categories of retailers. But there are other observations about tenant psychology and preferences that are noteworthy, including term duration. We looked at how retailers actually performed, survived and, in some cases, thrived amidst restrictive governmental health-related mandates and guidance, and found some interesting trends and patterns.

Impact on Retail Uses

The pandemic not only altered consumer habits, it also led to a shift in the mix of retail uses in shopping centers. As we fell into the pandemic, it was obvious that certain core "survival" retail uses were special and hardy and would better withstand customer avoidance. Perhaps the most notable of these survival retail uses has been grocery stores. Interestingly, we now believe other food concepts, particularly dessert shops, fast food and quick-serve food stores (such as sandwich shops) – what these authors refer to as "happy food" sellers – have a similarly strong resiliency. We have also seen the greater emergence of so-called ghost kitchen concepts – meaning, cooking facilities that only prepare food for delivery and/or takeout. Among other things, these new concept stores for restaurants who traditionally always included an indoor dining component allow for the leasing of fewer square feet in less desirable locations in a retail property (thus helping to reduce rental rates) and allow for a reduction of operational costs by avoiding additional costs that come with offering an indoor dining experience.