Good Times for Retail
In the land of Amazon, is all retail online? Not at all, panelists told 350 attendees last week at the Bisnow Construction and Development Summit at the Four Seasons. Demand for physical retail properties is high--and rising. (Retail stores have one thing online stores don't: a chance to get away from the computer.)
Washington State Convention Center CEO Jeff Blosser kicked off the event by detailing plans for the expansion of the convention center, which was delayed by the recession, but is now back on track. The facility would more than double in size, since Jeff says it's currently not large enough to compete with other West Coast meeting venues. If all clicks, an architect, engineer, and contractor will be on board by the end of this year, for a groundbreaking in 2016 or ’17 and completion by 2019. (And no, it's not your imagination--he's speaking in theater-in-the-round, not refereeing a boxing match.)
Jackson Dean Construction VP of operations Mark Lunsford says he’s seeing larger retailers now interested in neighborhood-sized product. That approach is especially useful in Seattle as its submarkets become more pedestrian-friendly. Marks adds that in the current climate, it’s harder to find materials and subcontractors. (Unless you've been hoarding plywood and nails for years, in which case, you've got other problems to deal with.) The pool of subcontractors shrank during the recession, so they cost more now. One consequence is that it's taking longer to put projects together.
Callison principal Bret Wiggins agreed there’s a definite downsizing trend in retail space, with some stores being reformatted to 50k SF or even 35k SF as mini-anchors. He says tenants want to be more efficient, but they’re also eager to present the brand above all else. The look and feel of retail space is improving, with projects becoming more memorable--because the goal is to create an experience that will bring people back.
CBRE superbroker Susie Detmer says that as national retailers expand, they want their brand to be the main thing in a retail space that shows itself to customers--the structure itself has to disappear, in effect. Retailers also want locations convenient to their customers, and want to replicate the look and feel of their most successful stores. Some tenants are now even interested in second-floor retail space, such as medical offices or destination restaurants that don't rely entirely on foot traffic. Cairncross & Hempelmann’s Nancy Rogers, a top land-use attorney familiar with evolving retail forms, moderated the event’s panels. (We'll have coverage of the second panel in our next edition.)
A special appearance was made by the King himself. Not really, that’s Bret, who does Elvis impersonations on the side, and whom we coaxed for a picture in Presley mode. We expect that his playlist includes the likes of “Heartbreak Full-Service Hotel,” “Hunk-a Hunk-a Burning TI,” and “Are You Leasing Tonight?”