Katherine Boccaccio/Chain Store Age - Over the last 12 annual trips I’ve made to Las Vegas for ICSC’s RECon real estate convention (which officially makes me a rookie in this industry of 20-, 30- and 40+-year veterans), I have always been able to detect some distinct trends.
That doesn’t as much make me a trend-watcher as it does a good listener. The retailers and shopping center operators and brokers who attend RECon each year tend to talk avidly in the aisles about the current events shaping the retail real estate industry.
However, after lots of aisle-walking and 30-odd meetings on May 23 and 24, 2016, in the Las Vegas Convention Center, I picked up on only one overriding theme this year: This is an industry in suspense. I’m not talking about total inaction, because stuff is most definitely happening, but it’s more about a watch-and-wait attitude, a wondering about what tomorrow, or next month, or next quarter will bring.
Understandable, considering that it is an election year, retail sales are soft, particularly in apparel, and some notable bankruptcies have been announced of late.
Still, I didn’t detect doom-and-gloom – it was merely cautious optimism, with an emphasis on caution.
Here is what I see as the key takeaways from RECon 2016:
1. To repeat, the industry is somewhat holding its breath, waiting to see how events continue to unfold over the coming months. With that, there will be challenges, but also opportunity for some.
2. Not a lot is coming out of the ground, but what IS is transformative. Lake Nona Town Center (a Steiner project within Tavistock’s Lake Nona master-planned community in Orlando, Florida) will create a social and commercial center for the Lake Nona community – and it will be done in typical Steiner style. Immersive, thoughtful, consumer-centric, special. ONE DAYTONA will bring first-to-market concepts, high entertainment and a strategic mix of uses as an adjunct to the popular NASCAR destination in Daytona Beach, Florida. Swire Properties’ Miami mixed-use project Brickell City Centre (developed in conjunction with Simon and Whitman Family Development) is in a leasing frenzy, adding top-tier retailers to the 500,000-sq.-ft. development. Butler Town Center – in Gainesville, by Butler Enterprises – could potentially transform the north central Florida market.
3. Florida is HOT. See #2.
4. Experience isn’t optional. “Everyone is driving experience,” said Spencer Bomar, principal, Avison Young. “And how do we deliver the experience? That’s the question with many different answers.”
5. Mixed-use rules. “Last year’s theme at RECon was outlet centers,” said Jeff Green, president/CEO of Jeff Green Partners. “This year it’s mixed-use.” Green teams with Jerry Hoffman, president/CEO of Hoffman Strategy Group, to densify sites, layering additional components over retail to create mixed-use destinations. “It’s about the highest and best use of real estate,” said Hoffman.