Seattle Retail Will Come Back Slowly, With Social Distancing In Place
Seattle’s office and residential real estate sectors are holding up, but its restaurants and retail are another story. Nationwide, retail sales slipped 8.7% last month, a major skid from when retail fell 3.9% in November 2008.
Bisnow’s Seattle Retail and Coronavirus webinar included Wallace Properties Kevin Wallace, TRF Pacific’s Rick Parks and Kemper Development’s Alesha Shemwell talking about how and when retail will be back in the Puget Sound.
“I think as time goes by, people will go back into their habits,” Shemwell said. “They will be shopping not only for goods that they need, but also for goods they want. But there will be a lot of consolidation, and the companies that get it right will be successful.”
Wallace said retailers will have to do the right thing by hosting fewer customers into restaurants and fitness facilities. That means less revenue than they brought in before the pandemic.
Shemwell said she sees a slow transition back to normal, albeit with shorter store hours, restroom attendants and curbside service.
“There will be social distancing when we reopen,” she said. “That may mean restaurants will have fewer tables and chairs.”
Wallace said about a third of his retail tenants needed a rent deferral the first month, and that he expects the numbers to get higher the longer the shutdown lasts.
“It will be a tough road back, and it will be an ongoing conversation about how to keep these tenants out of bankruptcy,” he said.
Parks said any business that was struggling before the coronavirus pandemic struck will be in a really tough position now.
“If they were three months behind, you may not be able to save them,” he said. “We need to try to build confidence in our tenants so they can apply for the loans.”
Parks said Seattle must reopen the right way, because the city can't afford to get to August and then tell everyone they need to stay home again.
“As landlords we have to remember the people side of it,” Parks said. “Have great empathy and compassion when you’re talking to people, and try to lift their spirit and confidence. A lot of people are really scared. With confidence, people can do a lot.”
TRF Pacific leases to grocery stores, a sector of the market with sales up 100%. “A lot of that is from restaurant business that is now going to the grocery stores,” he said.
Parks also touted innovative restaurant owners who are finding ways to generate revenue in the to-go space. One of Parks’ Belltown clients set up an Easter meal that sold out before noon.
“That’s a great sign,” Parks said. “He did half of his month’s sales by Easter morning. We are not going to sit around and make dinner every night in our homes. We are going to want to go to the bar and get a drink. It’s not going to be the same and it will take a few months, maybe longer, to get back into the swing of things.”
Wallace warned that the industry stakeholders should not expect the government to figure this all out on its own.
“Its incumbent on the retail and property owners to get involved in the advocacy groups for our industry,” he said. “We need to advocate to our elected leaders and individual council members about how important it is that we at least develop the rules of the road about how to get back to business.”