Small Retail Leasing is Making a Comeback!
Small Retailers may very well have been the most endangered species occupying commercial real estate during the 2020 / 2021 cycle. These independent operators of local or regional, retail businesses saw the very core of their business models being legislatively banned, or become socially impractical, during the COVID era.
The good news is that the public’s appetite for the offerings by these resilient soldiers at the smaller spectrum of capitalism, who are undoubtedly driven by their entrepreneurial DNA, was merely hibernating, and not rendered extinct.
Those restaurants which were forced to reinvent themselves into carry out only, zero contact, full transparency of operational protocol poster children, have seen a resurgence in business which leaves one with a sensation of “triumph over evil” and “the good guy wins”, reminiscent of the iconic post-World War two celebration images we are all familiar with.
The Mom & Pop retailers who scrambled to invent, or dramatically upgrade, a “Web Presence” to enable them to even venture a competitive run at the online commerce marketplace, are now welcoming back the loyal fans of “brick and sticks” retail shopping while enjoying the fruits of their “produced out of necessity” enhanced online sales platforms.
For the purveyors of communal experiences, the likes of yoga studios, martial arts, wine & paint parties, escape rooms, etc.… whose reliance on the economies of scale which come from one instructor being able to facilitate the participation by a multitude of clients, the challenge was quite different. These purveyors of the comradery-based services saw themselves without either the critical public need of their restaurant contemporaries or the tech-based diversification options of the conventional small retailers. For them, their efforts to adapt and overcome with outdoor alternatives, social distancing requirements, and reduced attendance events, required navigation of sizeable challenges, not the least of which being the weather during the long winter months of the shutdown. Thankfully, that spirit that calls the “participation driven” has resurfaced with the enthusiasm that comes from knowing somebody in the group will make you look good at doing whatever it is, your potentially hesitant self, ventures to try.
While it is very, and sadly, true that many of the smaller retailers did not survive the storm, for those that did, the future is once again bright. Retail shopping centers are seeing smaller space lease activity on the rise and expansion of retail concepts into new markets has encouraging momentum.
August 2021 | Eric Kuhn | Pillar Real Estate Advisors, LLC