Experts on Emerging Trends in Retail

LAS VEGAS—There is a lag effect with sellers at the moment where sites are priced to be at a level where construction and the associated required rents aren’t working. That is according to Daniel Ortega, principal at Edge Realty Partners. Ortega tells GlobeSt.com that this lag effect is particularly acute in hot markets such as Florida, Texas and Arizona, which will have to capitulate to make the numbers work. “Sooner or later, the market will stabilize,” he says.

We chatted further with Ortega on the retail market in advance of this weekend’s ICSC Las Vegas event, where another trend he is expecting to watch for the remainder of 2024 is “NAR Drama” as he puts it. “Residential real estate will dictate in a minor way how commercial real estate works,” he says. “At Edge we send commission agreements with the initial offer so that Landlords and developers see the total costs up front. The faster our counterparts can see the costs involved in dealing with a national credit tenant, the faster we can come up with an agreement.  Never wait to share the costs to the Landlord until the LOI is signed.  Always help the Landlord count the costs early,” he says.

We also chatted  with ICSC attendee Sandy Sigal, NewMark Merrill president and CEO, on trends he is noticing and he says that he is seeing tenants changing their prototypes and looking for different ways to achieve their store goals, technology not just as a supportive factor but as a main strategy and differentiator, and ways to change how we build to reduce costs and delivery times.

Sean Unsell, RDC senior studio director and associate principal, adds that adaptive reuse, renovation and redevelopment is very prevalent right now in the retail space with many opportunities available. “Clients are looking to convert locations that have been impacted by store closures into new and exciting shopping destinations,” he tells GlobeSt.com. “We continue to see trends in grocery and other essential uses that can re-energize anchor spaces in neighborhood shopping centers. The competition from online shopping has made an impact on many types of brick-and-mortar stores, however the need to purchase essential grocery and other specialty items in-person remains a necessity.”

He adds that “We also see a lot of smaller retail opportunities with apparel and convenience stores being developed. Our division that provides store planning, branding and procurement design services has seen great success with the smaller store formats, in contrast to struggling larger retailers.”