From the Desk of the COO
Contracting. Consolidating. Condensing. Whatever you want to call it, it’s happening to businesses across the United States. The effects of the pandemic have taken their toll and those who have been lucky enough to weather the storm are still faced with a whole new set of challenges, from health and safety, to supply chain and logistics, to management and staffing. As we slowly emerge from shutdowns, reduced capacity, and shortened staff/hours, it has become clear that some real estate trends have only accelerated.
With many of the larger, nationwide chains – and even some local outfits – we have seen significant contraction. The desire to spread as far and wide as possible has begun to shift. Companies have been forced to consider size and footprint more closely and have begun reducing the number of stores and restaurants within market areas. We have witnessed firsthand as businesses have consolidated to just one location within 30 miles of the next, where just a few years ago there were three locations in the same radius.
As companies rethink the old model of location-based, physical convenience in favor of a web-centric model emphasizing virtual convenience, more and more resources are being poured into web/app development and an omnichannel approach. Brick-and-mortar units are increasingly being used as extensions of the online shopping experience, serving as strategic pickup sites and showrooms which require smaller spaces and fewer physical locations. Whether this trend results in an overall loss of traditional customers, time will tell.
Another trend we are seeing is that many of these businesses are now choosing to relocate from traditional retail locations like malls into mixed-use developments, particularly those with established residential communities. By doing so, they have a built-in base of potential customers onsite which can help mitigate the loss of traffic due to the growing distance between stores. Mixed-use developments like our Westlake property, Crocker Park, also serve as much more than just shopping centers, offering great amenities to the public in the form of community gathering spaces, family-friendly activities, and entertainment/event venues. Businesses recognize this fact and are banking that consumers are willing to travel greater distances when their destination offers a more fun, all-inclusive experience than what just one store or eatery can provide.
In the past year alone, Crocker Park has fortunately added nearly a dozen new shops and restaurants. While not all of them fall neatly into the above category, there are many that fit the bill, and it illustrates just how desirable mixed-use centers have become in today’s contracting retail/F&B environment. Today’s consumers don’t want just another errand when they shop and dine. They want an experience.
Chief Operating Officer