This month the ICSC RECon Global Retail Real Estate Convention will come to Las Vegas with nearly 40,000 real estate professionals and exhibitors in attendance. As we take a look at the keynote topics, we can identify the core areas that are impacting the global real estate industry in 2018 and beyond.
The four key areas up for discussion during this exclusive three-day event are:
- Harvey, Irma, Maria: Lessons Learned From the 2017 Hurricane Season
- Online to Offline: Digitally Native Brands and Their Expansion Into Brick-and-Mortar
- Retail and E-Commerce in the Post-Department Store Era
- The Next 25 Years: Preparing for the Future of Retail and Mixed-Use
By researching and expanding around these four core topics, we’ve been able to gather trends and insights that will help to expand and improve our knowledge around the future of commercial real estate.
We can use these four cornerstones to thoroughly research and gain insights into the trends and problems that are changing the face of retail real estate. Using the problems that are addressed, we can look for solutions, particularly in the areas of real time engagement, emergency communications, and mass communications.
So where is the commercial real estate industry at in 2018?
As it stands, the global retail real estate agency is adapting to changes that are a result of a boom across the eCommerce industry over the past 5-10 years.
This is a two-pronged sword… With many large department stores initially closing and deciding to trade exclusively online or having to close because their prices and product offering were being beaten by their online competitors.
On the other side of the coin, we are now seeing a global expansion in digital brands that have decided to invest in brick and mortar stores as they become increasingly popular and want to both develop an offline presence, whilst also building a concise distribution network for their products.
Natural disasters have a serious impact on commercial retail in areas that are prone to hurricanes across the US. With mass communication software now readily available for commercial businesses. It’s becoming increasingly more important for businesses to develop a disaster management plan alongside a robust business continuity plan in order to prepare for potential disasters.
Millennials are the generation that continue to innovate and converge industries in order to create bespoke experiences for retailers and consumers.
Mixed use developments are continuing to rise in popularity. There are a number of reasons that these types of commercial/urbanisation hybrids are attractive to both retailers and investors:
- They offer a greater exposure to customers and provide income streams from both residential and commercial tenants
- They offer better property management opportunities with higher quality tenants and short vacancy cycles, leading to better services and improved support
- They are often in fantastic locations offering tenants the luxury of nearby existing amenities, they also offer greater exposure and footfall to commercial investors and brands
- Generally speaking, mixed use developments offer less risk to investors as they offer higher income, cash flow, longer leases and less competition
- Walkability and transportation are often standard features of mixed use developments. Generally speaking they will be located close to urbanizations and will offer great access to public transport with the ability of walking to most amenities for most tenants
Where is the real estate industry heading?
The positioning of the ICSC RECon event has helped us to see just what areas are impacting the face of the commercial retail real estate industry this year. But as we look ahead towards the future, there are several areas that are most definitely going to shape the future, especially in the U.S.
Technology is undoubtedly continuing to shape and develop the future of the commercial real estate industry. There is software available now that lets property managers and marketers connect with retail customers on and off the property. Text messaging platforms such as Straightxt offer simple dashboards for properties and marketers to communicate efficiently and via a medium that consumers check often: their smartphones. In addition, once these customers enter the property they’ll need to connect to your onsite wifi which allows you to conduct proximity marketing using tools like Wi-Fi Alive.
An Aging Population
With an aging population, we are already seeing a growth in the development of healthcare centers nationwide. In fact, there are many retail developments being converted into healthcare centers as more and more people need easy access to medication and healthcare providers.
In fact, one of the presentation topics at ICSC RECon is ‘Attracting Medical Providers and Healthcare Facilities to Your Shopping Center‘ highlighting the increasing demand in the marketplace for such developments in healthcare.
Millennials have modern shopping habits reflected by their lifestyle, and they are not particularly happy with the traditional 9-5 Monday to Friday model of shopping. They have a very experiential focused outlook seen in their shopping habits, often combining food, shopping and entertainment.
Therefore, we can predict the future demand for mixed use developments will see a rise in brick and mortar locations for popular e-tailers, with entertainment and dining mixed in, alongside hip millennial urbanizations. These are the shopping centers of the future, a more liveable and entertaining experience with opening hours that reflect the needs and expectations of the core customers.
Text messaging software will be important in engaging and informing such millennials as all retailers must be ready to connect to devices such as smartphones which seem to be glued to everyone’s hands 24/7.
In conclusion the key four areas that are impacting the global retail real estate industry are natural disasters, brick and mortar expansion from online brands, the rise in demand for mixed use developments, and millennial expectations and the desire for mixed use lifestyle and commodity reflected in new developments.
Insights we’ve gained over the years have led us to develop Straightxt, our text marketing platform, and Wi-Fi Alive, our proximity marketing tool, with the real estate industry in mind. We wanted to create platforms that were easy to use by those in the commercial real estate industry to drive traffic to their properties. These tools have evolved as the commercial real estate industry has changed, that’s why were always looking at future trends across the industries of our core customers.