As e-commerce becomes a daily part of our ever increasing “must have it now” lifestyle, most businesses are looking for ways to develop an even better brick and mortar appearance to attractive customers the old fashioned way. To keep up with the rates that e-commerce is producing though, the commercial real estate that is purchased by these retailers must adhere to every little aspect of what the consumer is looking for.
With that being said, commercial real estate investors are also changing with the times of online shopping as they are counting less and less on tenants to produce their rent growth. These changes are set to affect not only how we do business in person, but how the make up of the stores, rent and complete shopping experience will now be as 2014 continues to move forward.
For the time being, national retailers are still looking to expand their commercial real estate space to include new facades that are smaller in size and more cost effective to correlate with their online presence. Investors can no longer just count on this rental income to come from every lot they have available anymore, yet are now having to help the stores produce profitable quarters in order for a win-win to occur.
In the case of real estate investors, the spaces that are being left available are now being marketed to those businesses that are “internet resistant”, i.e. barber shops, doctors offices, dentist offices, restaurants, etc. With a new tactic to seek after those that deliver a service over a good, seem to be the last full time commercial real estate purchasers that rely on space to produce their businesses income.
"The role of town centers in our communities has evolved in terms of adding restaurants, adding experiential uses, adding more events and programs," explained Stephen Lebovitz, of CBL & Associates Properties. "Those are the types of things that we are focused on in terms of 'competing' with the internet, to make the mall experience as compelling as possible to our shoppers. It’s something that every shopping center owner is trying to get a handle on and understand.”
What is interesting to note though is that approximately over 90% of online shoppers have in fact visited their local mall during a three month period. On top of that staggering statistic, those that shop online and in store seem to shop nine times yearly, in comparison to those that shop online only three times total. Nothing can stop the need for a product to have that day. Even though e-commerce can produce next day delivery, that is still a 24 hour difference than what could be bought and used the same day from a brick and mortar store.
Supplanting Catalogues
With the increase in e-commerce this last decade, the idea of shopping online is becoming more and more of a re-occurring trend than that of a fad. What most store owners are noticing though is that shopping online is starting to take over the part of the catalogues with the new option to also purchase then and there without any line or wait. Marketing for these stores has become more and more digital in comparison to just 20 years ago when catalogues were mailed out to homes displaying the new styles and trends to buy this season.
Overall, the need for a commercial real estate space will never become a thing of the past. Even as stores downsize the numbers and space available to the public in favor of online shopping, the need to purchase the same day and receive the product at that moment will never change. Commercial real estate is still a hot item for investors in 2014 and even with these minor changes to the way renters and landlords are working together, the ultimate need and want for products here and now will always keep malls, shopping center, offices and more in business with their real estate investor.
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