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The “death of retail” once again over dramatized.
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Fatigue is pushing some to exit.
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Challenges with refinances in 6-18 months will create opportunity but very little real distress in the NW.
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Remote work vs. physical space, productivity, employer flexibility.
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Deal structure changes:
1. Enough data points and light at end of tunnel
2. Increase in guarantees and/or holdbacks
3. Debt availability for right deals, but not all
4. Larger lender reserves and holdbacks for future government shutdowns.
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Debt drives salability more than ever.
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Shorter-term leases with tenant flexibility, percentage rent, termination rights, rent reductions, force majeure clause.
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Changes in grocery and pharmacy will be the largest upcoming evolution.
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Amazon Grocery - large and small format
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Delivery/pickup growth and here to stay
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Pharmacy
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Walgreens 2,500 SF drive thru only - what once was the gold standard is setting up for massive change
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Amazon pharmacy coming
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14k sf prototypes outdated and very risky in most locations
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Technology - AI, Virtual Reality all on the horizon to upset, shift, reinvent brands.
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Repurposing and vertical development.
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Alternatives uses - Industrial, MF, medical, office. Taking advantage of excess parking and densification.