CREJ

Page 2 — Retail Properties Quarterly — May 2020 www.crej.com Contents Letter from the Editor A t the beginning of May, Moody’s Analytics released a new commercial real estate forecast for 2020 and identi- fied retail as the property type to be most affected by the global pandemic.The real estate information services group predicted that national retail vacancies will surpass previous highs, with effective rents projected to fall by 11% this year – a drop that is almost twice the total decline in rents after four years of the Great Recession. However, while overall retail sales dropped a record 8.7% in March, not all retail is equal, according to a Mar- cus & Millichap April report that examined how the COVID- 19 pandemic, and subsequent stay-at- home orders, is impacting the retail industry nationally. Not surprisingly, grocery store sales are sky high, reporting a 26.9% jump in March. In early 2015, restaurants started outselling grocery stores, but coronavirus is reversing this trend: Res- taurants and bars saw a 26.5% decline in March. “Of the $46.2 billion decrease in month-to-month retail sales, restau- rants and bars accounted for $17.5 bil- lion,” the report states. Even as jurisdictions around the country play with reopening plans, in-dining experiences are not being green-lighted in many areas. By the time they get the go-ahead, vari- ous reports and conversations are putting the number of restaurants expected to be permanently closed at anywhere from 20 to 40%. Dining-out destinations aren’t the only ones hurting.The report specifi- cally calls out movie theaters struggling to return to business even once they’re cleared to open as well as tourist desti- nations hurting until there’s a vaccine. Additionally, clothing and accessories retailers experienced a 50% decline in month-to-month sales in March. It’s not all doom and gloom though. Marcus &Millichap’s report highlights a few other retailers that are doing well. Building materials and garden equip- ment/supplies dealers witnessed a $550 million increase in sales in March – apparently being trapped at home is prompting many to work on those home improvement to-do lists. Health and personal care stores, which often overlap with grocers, enjoyed a $1.3 billion boost.Wholesalers and big-box stores – thinkWalmart,Target, Costco and Sam’s Club – also were winners as people sought to stock up on essentials and buy in bulk. Despite department stores reporting a $2.1 billion decline, this “general merchandise store” cat- egory posted a $3.8 billion increase in March sales, according to the report. All of these numbers are from a national perspective. As authors in this issue discuss, Colorado survived the “retail apocalypse” relatively well – something that should give readers hope that the market might experience a smaller dip and a quicker recovery from this black swan event than other areas. Michelle Z. Askeland maskeland@crej.com 303-623-1148, Ext. 104 Retail stats and COVID-19 Denver saw retail growth before global pandemic Jon Weisiger Denver’s retail has a proven resiliency track record Jason Schmidt, Chad Murray and Sam Zaitz An overview of COVID-19’s impact on retail space John Mackel Positioning cities for retail recovery amid crisis Daniel Ryley Owner insights: Navigating retail center responses Ross Carpenter Centers discuss returning to a ‘new normal’ Diana Fiore How human connection will shape our future Eric Diesch Legal limits: Shutdowns, rent issues & distancing Brian J. Connolly and Lindsay K. Lyda What receipts tell you about metropolitan districts Anne Bensard The NLRB improves its procedures and rules Mark D. Nelson Colorado’s malls continue butterfly transformations Andrea Ackerman How to support the businesses that support you Ilene Vivinetto Suter 4 6 8 10 12 14 16 17 18 19 20 21