Conversion Opportunities in Commercial Real Estate

The rapid emergence and evolution of new consumer shopping habits have significantly disrupted the commercial real estate industry. As a result, landlords and tenants have had to adapt their strategies to accommodate the changing needs of their customers.

Mixed Use Properties

According to experts, the number of mixed-use projects has increased significantly. This type of development combines a large property with various uses within one area. More retail-only projects are being converted into residential and office buildings.

Retail-only projects are becoming less prevalent as development projects focus more on mixed-use neighborhoods and live-work-play communities. According to Karen O’Malley, the developers of these projects are taking into account their customers’ varying needs and creating a diverse tenant mix.

Previously, retail-only projects were considered discrete destinations where consumers would go without visiting other establishments. Now, landlords realize these tenants can help bring more people into their properties.

Although grocery is considered a relatively underpenetrated sector when it comes to online shopping, it is expected to change as the development of new technology and the increasing number of systems that can pick up fresh produce will make it easier for consumers to shop online. This will reduce the need for additional retail space.

Some landlords are also exploring the potential uses of retail space that were previously prohibited, such as medical marijuana shops and massage studios. Due to the growing acceptance of marijuana and the increasing popularity of vaping products, some of the previously placed restrictions are now being reconsidered.

Parking

In the future, the amount of parking space required for retail space is expected to decrease. The demand for parking spaces will vary depending on the time of the day and the week. The rise of ride-sharing services such as Uber has also allowed more people to enter stores without their own cars.

These services are also expected to create a need for additional dropoff and pickup areas, which are typically not included in the designs of most retail establishments.

Cities are also responding to the changes by reducing the number of parking spaces that they require for new development projects. Doing so will allow them to encourage smart growth and promote public transit.

Leasing

Popup shops used to be regarded as undesirable by landlords, who thought that these types of establishments were nothing more than Halloween costume stores. Since they are becoming more prevalent, it is important that landlords accommodate the short-term leases of these types of establishments. These types of shops are often incubators for new businesses, and they can help drive traffic.

One of the most common features of a retail lease is the percentage rent, which is a calculation based on the sales that a store generates. Since the rise of online retailers has made the concept of this type of lease more complex, it is now important that landlords are aware of the changes in the retail industry.

Although it is impossible to predict what will happen in the future, it is still important that landlords are flexible. This is the best strategy to ensure that they are able to adapt to the changes in the industry.

This article was originally posted on David Emory Fleet’s website.