February 2018 — Retail Properties Quarterly —
Page 27
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www.universalpro.comboth traditional and e-com-
merce retail strategies.
Other retailers are pio-
neering solutions that
incorporate e-commerce
strategies into new concepts
that most likely will require
more industrial space in
the future. For example, the
recently introduced 3,000-sf
Nordstrom Local keeps lim-
ited inventory on site with
the opportunity to purchase
selections online. With off-
site storage nearby, custom-
ers can expect same-day
delivery of their products to
the store or their homes. It
is yet to be seen how this
type of model will affect the
demand for new industrial
space, but it is certainly a
trend to watch.
As retail continues to
evolve in Colorado and
throughout the country,
companies will continue to
figure out new and innova-
tive solutions to meet the
changing demands. And
while this evolution might
take many different forms,
it’s becoming increasingly
clear that retail will rely
heavily on the flexibility and
functionality of the industri-
al market moving forward.
V
Good
Continued from Page 20as Macy’s and Sears, continue
to downsize their portfolios
to reduce overall store count.
Developers across the country
are dealing with this issue –
when a department store clos-
es, it creates co-tenancy issues
for the inline shop tenants.
However, the silver lining
is that the location of these
department stores typically
is great real estate because
they often are the dominant
sites with great visibility and
access within their centers.
This aids the redevelopment
and repositioning of these sites
tremendously. A long-term
view of replacing these large
boxes with a mix of uses that
enhances and supplements
the existing tenant mix cer-
tainly will serve to enhance the
strength of these centers going
into the future.While it can be
painful and capital intensive
in the short term, performing
these types of repositionings
ultimately adds value for the
center, the owner/developer
and the community.
Rather than buying into
the media hype regarding the
“retail apocalypse,” we view
this as yet another transforma-
tion of the industry. Certainly,
it is a formidable challenge, but
out of change comes opportu-
nity.
V
McFarland
Continued from Page 21and return business for the
team.
•
Help your tenants by hiring
a pro.
Consider hiring a retail
consultant to provide an
outside perspective to your
tenants on ways they can
improve their business. This
could include details such
as merchandising, décor,
floor plans or even go to the
extreme of training employ-
ees. While online retail is
incredibly convenient, it
lacks the human touch that
shoppers look forward to
experiencing when they
visit quality stores. Help
your tenants find the ways
to make their stores places
people want to buy from by
bringing in someone who
can help them succeed.
Finally, an encourag-
ing fact for retail property
owners and their tenants
to remember: Although
e-commerce is on a steady
increase (up 15 percent from
third-quarter 2016 to third-
quarter 2017), third-quarter
e-commerce sales only
amounts to 9.1 percent of
total retail sales, according
to the U.S. Census Bureau
News from the Department
of Commerce. Based on this
data, we are still a brick-
and-mortar society that
loves to go out and shop.
It’s up to you to get creative
and attract shoppers to your
property.
V
Vivinetto-Suter
Continued from Page 23There are three primary
retail uses that generate
almost 80 percent of sales
tax generation for the area;
clothing and accessories,
home furnishings and res-
taurants/hospitality. In the
last year, these categories
have increased by 14.2 per-
cent, 17 percent and 20.5 per-
cent, respectively.
As of the third quarter, total
retail sales tax collections
for the district were up 7.5
percent versus retail sales for
the same period in 2016. This
is the fourth consecutive year
of annual increases in collec-
tions with the area consis-
tently outperforming the city
and county of Denver.
In 2018, six major construc-
tion projects are projected to
finish. These developments
will add 201 hotel rooms,
236 residences, 110,000 sf of
office space and over 50,000
sf of new or renovated retail
space.
National retailers are tak-
ing notice. In the past 18-plus
months, several stores and
restaurants have opened or
announced plans for entry to
the Colorado market within
the BID boundaries.
Recent announcements
and first-to-market concepts
opening include Frye Boots,
Hedgerow, Vineyard Vines,
Quality Italian, CB2, Soul
Cycle, 801 Fish and a Bonobos
Guide Shop. Other exciting
retail developments include
the new two-level flagship
for Design Within Reach and
the 25,000 sf of retail for ANB
Plaza along Second Avenue.
Several more announce-
ments of new stores and
restaurant concepts are
expected.
V
Phetteplace
Continued from Page 24asset and are looking to
retail consultants to help
creatively reposition their
properties.
Vacant department stores
and big boxes often are
reborn as another depart-
ment store (as much as 20
percent of the time) and
family clothing uses (15
percent). Entertainment
uses also are dominant with
full-service restaurants (14
percent), amusement and
recreation (10 percent), and
theaters (8 percent) rounding
out the top five reuses.
In the Denver market, our
vacant boxes, whether gro-
cery (Albertsons, Safeway
and Walmart neighbor-
hood markets) or other uses
(Sports Authority, Gander
Mountain), are appeal-
ing most to fitness (Chuze,
VASA, Crunch Fitness, Planet
Fitness) and entertainment
uses (Main Event, Bowlero
and some theaters).
Denver’s retail market
continued to expand in 2017
– with absorption and rental
rates trending up and vacan-
cies trending down; however,
the market remains bifur-
cated. Because of limited
new supply, there is high
demand for second-gener-
ation space in well-located,
Class A retail centers, which
are full and thriving. Despite
competition for premium
space, Denver has attracted
international retailers (IKEA,
Uniqlo and H&M) as well as
national ones (Whole Foods’
new flagship store in the
Union Station neighborhood,
Trader Joe’s, Cabela’s and
Alamo Drafthouse). Con-
versely, aging Class B and
C centers with poor demo-
graphics, often with vacant
anchor space, continue to be
challenged.
Despite the many disrup-
tions and concerns about the
future of retail, 2018 is fore-
cast to be a year of evolution
and opportunity for retailers
nimble enough to develop
viable, new business models
with emphasis on customer
experience, technology tools
and rightsizing brick-and-
mortar stores.
Raymond Cirz presented at
the 2017 Counselors of Real
Estate Annual Convention in
Montreal in September.
V
Cirz
Continued from Page 4