For over a year now we have seen that the Trend in Residential Real Estate has been towards smaller homes. Parents have been downsizing because the “Empty Nest” is too much house after children move away, and others are opting to avoid high upkeep and maintenance costs by building houses that are as much as thirty percent smaller.
We have also seen ample anecdotal evidence that the same was happening in Commercial Real Estate. Big Law Firms have been laying off attorneys, Insurance Agencies have been downsizing, and Mortgage Companies, if they have survived, are much smaller than they previously were. Well now we have more evidence that “Small is In”. Target announced nine months ago that they were going to experiment with a smaller footprint store in the 60,000 to 100,000square foot range. They have recently disclosed that the first Smaller Target will be in downtown Seattle; a three story 103,000 SF store. While this is not at the smaller end of the range there will surely be some in the 60,000 SF range in the near future. As the expansion opportunities in the suburban markets are exhausted, the Big Box Retailers will need a smaller format to penetrate urban markets where real estate considerations, operational and profitability challenges preclude the larger format stores.
Some other examples of Small being In would be Petco, which has been exploring smaller express stores for the urban market, as well as some Fast Food and QS restaurant formats that need to penetrate additional trade areas.
So the trend towards bigger houses and properties that started in the 1950’s has finally been replaced by smaller, more efficient houses and properties today.
Good Luck and Good Selling.