LAS VEGAS—There is no longer a “build it and they will come” aspect for retail development. So says Christopher Beavor, CEO of CAI Investments. GlobeSt.com visited the CAI Investments booth last week at ICSC RECon and discussed trends in the retail space and how the industry is changing.
Beavor tells GlobeSt.com that he is seeing an increased absorption of retail space for non-traditional medical office and service-related uses. “The large regional and enclosed malls will be refitted or repurposed into medical offices and fitness facilties. You may also see them demolished because many are in valuable infill real estate locations and they could be repositioned into mixed-use apartment/condo spaces.”
He also tells us that over the next five years, due to the consumer demand for immediate delivery of online orders, the retail space of big box companies like Office Max will convert into local distribution centers for one- hour or less delivery points.
When asked how the industry is changing, he says that right now, he is seeing less capital pursuing big box, a trend he expects to continue. “I also believe that consumer demand for immediate deliveries of online products will increase. You are already seeing this with Amazon and I think more online outlets will deliver in shorter time frames to try and compete. As a result, many big box retailers will close, and the space will be converted to distribution points for potential drone deliveries.”
As for his predictions for 2019 and beyond? Beavor says that we can expect to see traditional enclosed malls located in desirable communities with the best visibility converted to mixed-use and include a multifamily residential component. “A lot of the big box retailers, which are in fear of closing, will convert to local/regional distribution centers for same-day drone deliveries of products ordered online or via mobile phone app. I also believe the hospitality markets will thrive as more municipalities legislate in favor of tougher ordinances and zoning against short-term rental services, including Airbnb home rentals and VRBO vacation rentals.”