Published on November 2, 2012
Ron Holmes, Founder and Shareholder of Holmes Firm PC, moderated Bisnow’s Third Annual Retail Real Estate Summit on Wednesday, October 24, 2012. Ron, seen here speaking into the microphone, had the following observations about the event.
Charter Holdings’s CEO, Ray Washburne, Founder of the successful restaurant chain Mi Cocina, owner of Highland Park Village and owner or investor in several other development projects across Texas, indicated that because of the looming rise in interest rates, a project should have an 18 month exit strategy in order to be successful. He indicated that multi-family development is more promising than restaurant and retail development at this time.
MGHerring Group’s President and COO, Gar Herring, indicated that because of the increase in on-line retail sales, a fundamental shift is occuring in the real estate market.
Other panelists were more bullish on the subject of retail development. The Retail Connection’s Co-founder and President, Alan Shor, opined that although e-commerce is changing the way that retailers are doing business, those changes aren’t necessarily a threat to the retail real estate business. Instead, the way that business is conducted is shifting.
Retailers are trending towards smaller stores with off-site distribution centers. Additionally, businesses that were strictly on-line before are opening up retail storefronts. Shor indicated that stores such as Apple and Walmart are also using their stores as distribution centers for local pick-up and return of online orders.
PegasusAblon’s Principal, Mike Ablon, indicated that health and wellness related development is an area that will continue to see growth. The aging Baby-Boomers are a strong sector of the consumer market, and with age, they are becoming more health-conscious.
The panelists all seem to agree that the retail real estate market is evolving due to the continuing fast-paced growth of e-commerce. Retailers are trending towards either smaller retail spaces and larger storage spaces within the same overall building footprint, or smaller retail stores and off-site storage and distribution centers, in order to accomodate a change in the way that consumers are shopping. Retailers are accommodating this change by implementing logistical strategies including on-site and off-site distribution of local online and in-store purchases.
Photo credit: Bisnow
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