Article
Strategies for urban owners and developers to rethink retail property
Oct. 17, 2022 · Authored by Isabella Risucci
A version of this article was previously published on Commercial search.
The retail property landscape transformed significantly during the COVID-19 pandemic, and it’ll likely take time for tenants, landlords, and cities to adjust to the new normal. However, one pre-pandemic issue persists: how urban property owners and developers grapple with the oversupply of ground-floor retail.
Explore tips for developers and owners to assess their ground-floor retail approach in an evolving environment.
Industry outlook
The abundance of retail property accelerated as lockdowns eased with high turnover and an industry struggling to attract their client base back to brick-and-mortar locations.
Cities, long relying on retail sales as a key source of tax revenue, tend to assume all ground floors in dense neighborhoods can — or should — be retail.
Some developers think differently, but still exacerbate the problem by relying on the rinse-repeat tradition of hiring a broker and waiting. More property owners and consultants are embracing the need for change, the breakage of old norms, and testing new strategies, uses, and looks.
Ground-floor retail challenges
Ground-floor retail is one of the most challenging product-types in commercial real estate, and owner-developers that take status-quo approaches may see spaces empty for too long.
Office or multifamily firms develop many urban mid-to-high-rise buildings, and the ground floor shop space may be treated as an afterthought to the 100,000 square feet of corporate space or housing they need to fill.
This places heavy reliance on a store’s front door and brand to fill the upstairs properties, because prospective tenants don’t want to deal with dark storefronts and zero activation.
With these challenges, developers that break their own mold, challenge standard approaches, and create innovative solutions could be more likely to find success.
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