Retail Space Seeing Store Openings Return

from a real estate perspective. Joining us now is Angie salon Ki, National director of US Retail at call Yers, the commercial real estate brokerage services firm. How are you on. Good to have you on the show. Thank you so much. It's great to be on the show with you. So just give us an update right now on how things are going around the country. We like to check in with call Yer's pretty much once a quarter to get the temperature of what's going on when it comes to

commercial real estate and and and where things are. How would you characterize foot traffic and and and the temperature compared with pre pandemic. Yeah, that's a great question. Intense though the retail sector definitely has seen a nice kickoff ino and nevertheless we're still spending mostly due to the transfer of spend from services to products. Entertainment and leisure are still not back to normal. Fully, the great news that we're seeing when it comes to retail is really

around the absorption. So roughly seventy six point finally in square feet of space has been absorbed since the end of one, which is the highest figure recorded since twenty What does that mean? So basically what we're seeing is UH store openings are actually outpacing store closures and it's

great to see that because it's become quite dynamic. Retail has definitely morphed into traditional retail to non traditional retailers expanding, so a lot of wellness, healthcare medtail retail that we call it UM expanding into a lot of their retail developments. So you're starting to see this integration which has been fantastic. Also,

is it sticky? Is it? Says? Yeah? Yeah, yeah, most definitely. Um. Look, we have all looked at, you know, convenience as being a primary factor right especially right now where we have been working remotely, working from home, trying to kind of um you know, work from home, but also you know have family and UH and and kids still sometimes work, staying at home, and going back to school. So this convergence is really starting to create a pure factor of convenience.

If I can go to a shopping center and take my pet and have my pet, you know, go to the veterin area, the new modern that's uh concepts we're seeing, or going to a a medical um, you know, clinic at a shopping center and then go grocery shopping right after. Hey, it's all about convenience and about time, all right, So where's the dead space? Where's the space that's not coming back?

So a lot of the space. So one thing that was really fascinating we were looking at some of the stats with I C, S C, and you know, overall occupancy is hovered around n UM. So the dead space that we're starting to see is going to be in maybe some of those markets where you had product that was already you know uh C and d B minus retail that really never came back regardless of the pandemic. Those are the spaces that are are still lingering out there.

But we're also seeing new concepts taking some of those spaces, i e. As warehouse space, UM because there's uh, you know, there's a need in demand still for that last mile. And Jeff heard you talk a lot about health care services, biotech, uh and the idea of offering services that you know can't really be replicated online at this point. How much of an area of growth is that for for retail

space right now? Oh gosh. In terms of numbers, this is just a pure estimate, we haven't really callied it, but I would say that when you look at an average shopping center that's roughly let's say, you know, two hundred thousand to three d thousand square feet, we're looking at you know, um medtail retail and medical retail coming in and probably taking you know, five of that space.

So it's a pretty significant amount. Um So, the larger the square footage of the shopping center, the higher that number maybe, but that's you know, we're looking at you know, uh wellness, healthcare, um uh mental wellness. There's a lot of different concepts that are coming out. Yea, hey, listen on State, sit tire for a second. We've got to do a little bit of news, but we'll come back. Get back to Angie solon Ki's national director of us

RETA Colliers. They're publicly held real estate services and investment management firm. They've got about fifty one billion in assets under management global, so they see real estate all the different verticals, and of course we're talking retail here, and that's really what I want to hit on when we come back, you know, talk a little bit about the differences between the U S and other parts of the world as we see the pandemic ceasing in some areas.

Good point a siding, Maybe I should say, yeah, well, right now, right fingers crossed, I want to get back

to our guest on g. Salon Ki. She's National director of US Retail at Colliers Uh you know them, well, publicly held real estate services and investment management firm, and she's still with us on the phone in San Francisco, and I wanted to I know you that you oversee national you're the national director for US Retail, but I want to call yours is a global operations So I want to get an understanding of what's happening around the

world right now. How would you characterize the different pace that other parts of the world are leaving this pandemic hopefully,

I mean, what is the data telling you? Yeah, what's really interesting is if we stop and look at the different countries in terms of omni channel, And so when we looked at the omni channel percentage change year over year, you're looking at anywhere from three to five percent increase in terms of UM countries adopting the omni channel, which in effect really is helping the overall UM consumer economy the revenues for retailers, etcetera. And what I mean by

that is UM. For example, we're seeing fast food chains who are reporting revenue growth from digital orders, making up one third of some of the company's global sales. But is that so is that pandemic or you think that stuff that sticks? I think that's going to stick, because again it goes back to conveniences. So whether you're going back into the office and you're accustomed to ordering online for certain certain feed goods or fast food lunches, et cetera. UM,

I think that's going to continue. So one thing I want to ask you, Tim and I. If we walk out the door of Bloomberg headquarters, there is available space. I think at least two spots across the way on the corner there used to be the container store. There was a Starbucks in our building at a Starbucks they're both gone, and the container store had a pretty big space. I mean, there's a lot of open spots as you

walk around, and that's just our block. So help me out regionally, you know, Tim was just asking you a global perspective question, but I do wonder it does feel like there's some really rough spots when it comes to retail and real estate. And then of course there's the American Mall across the way that continues to kind of figure out its way. I mean, that's kind of a special case, but it's been a special case with a

lot of you know, years of tough times. Sure, sure, no, I would definitely agree that in certain markets where we have uh, you know, dense urban um you know areas, those areas definitely are we're going to see a slower growth back to you know, higher occupancies, et cetera. But the positive news on that is that although we are seeing these vacancies in various sizes, we're starting to see

the retailers coming back to tour these markets. So what we're seeing is that they're coming in, they're touring the markets because they're ready to start staging and identifying space to reopen um. It may most likely be a different concept. It might be a larger or smaller concept. It might be you know, that container storm might convert into multiple stores. But we are seeing tour activity from retailers start to

peak up again, and this is from global brain. So I'm wondering about the permanent shift that we see on the other side of this pandemic. What fundamentally changes when it comes to commercial real estate, when it comes to occupancy, when it comes to who and what is occupying these spaces.

So I would say from a forecast perspective, there are still those outside influences, right, and that means, you know, when we start to see you know, the inflation UM margins for retailers UM starting to creep back up if they're not normalizing hopefully by by um, you know, the

summer of this year. But we're also starting to see UM, you know, retailers take some of the capital that they've harvested UM and as you probably have seen some of the you know call it top um, you know, piered retailers are definitely starting to take their capital that they've harvested and put it back into either remodeling stores, making stores more efficient operationally, where they're you know, looking at the point of sale where it's directly done by the

consumer themselves. Uh So there's new technolog AG NEWS systems that are starting to come back in and be deployed, and through that effort, we will start to see the opportunity for retailers to basically take on more retail but maybe at a smaller footprint, or they're going to be more operationally more optimized, so they're letting they're able to

start reinvesting capital in more that omni channel approve. So, Angie, I'm just thinking about our audience UM in terms of investors thinking about the real estate real estate space, I do think, you know, we've all expected some real fallout, significant fallout because of the pandemic, but it does seem like there's been a reallocation and somehow for the most part getting through. What do you think our investment audience needs to understand about what you are seeing when it

comes to US retail space in particular. Yeah, I would say that from a capital market's outlook, from an investors investors are actually coming back into the retail space UM, and we're actually seeing that, you know, in UM based on fourth quarter sales and this is actual sales of shopping center that the fourth quarter actually accounted for a roughlyent of total sales for the year, and that for the year's sales total about was eighty four billion dollars.

So we're actually forecasting pretty strong and ay growth in the next five years from a retail pricing perspective, UM reaching somewhere in the range of five in two. It's possibly going to be the largest increase in value since UM. Of course that's oriented in around grocery anchored shopping centers. But we're going to continue to see that optimism come back and that starts that will start to come back

in terms of the urban core retail market. In addition to that, we're also seeing a lift in loosing activity in retail overall. Andy, what are the shifts that you're seeing when it comes to where people are working. You're just talking during the break about Eric Adams, the mayor of New York, telling people that it's time to come back to work. UM in thirty seconds, are what are the patterns that you're seeing in the US in different cities.

I would say that in UM some of our kind of more lax cities were masked mandates to come down or much more relaxed. I would say those cities have um actually seen a very accelerated momentum when it comes to retail easting, and retailers are moving into those markets i e. North, the North or sorry southeast, UM in central region, UH, in areas where it's a little bit more you know, mass mandated, we definitely are seeing a

very slow reaction come back in those cities. All Right, we gotta run, Andie, thank you so much to Angie Solanki over Collier is joining us on the phone.