CREJ

Page 2 — Retail Properties Quarterly — August 2020 www.crej.com Contents Letter from the Editor P repandemic, retail was undergoing a major over- haul. Successful retailers had been working hard to reinvent themselves, embrac- ing the experiential and investing in omnichannel marketing; those resisting change continued to strug- gle against ecommerce.With the entrance of COVID-19, that “culling of the herd” had been catapulted to warp speed, many of the panelists said during CREJ’s retail livestream conference earlier this month. And while some of the retailers recently making bankruptcy headlines may not have been the big moneymakers in recent years, they were the “hamburger helper” of many retail centers, helping fill sites and create strong tenancy, Stuart Zall said. One panelist, Erika Shorter, summed up a lot of the panelists’ outlooks by comparing the pandemic to a forest fire – it’s horrible and dev- astating, but at the end of it, there’s opportunity to regrowth and new growth, which could benefit consum- ers in the long run. If the pandemic is just fast-forward- ing the fate of a lot of retail, the key will be helping ensure there isn’t arti- ficial loss, said Daniel Ryley. For restaurants specifically, most have accepted this isn’t going to be a great year; the key is just to survive. Then, the hope will be that later the ingenuity we’re seeing today – in terms of embracing delivery/take-out (including alcohol); outdoor dining; collaboration; etc. – will help drive revenue and growth down the road. One theme repeatedly discussed during the conference – as well as in this issue – is investors flight to security. As one panelist put it, in the COVID-19 era, it has become a tale of two retails: the essential vs. the non- essential. Many essential businesses haven’t experienced much change, and some are thriving. On the other hand, nonessentials are struggling. According to panelists, there is a wid- ening of spreads between these two retail types, and lenders and investors are staying away from nonessential for the foreseeable future. The fate of some of these busi- nesses is very hard to predict; but the panelists shared a variety of opinions. For example, dry cleaners have taken a huge hit as people work from home, while athleisure companies are see- ing record sales. Back to school typi- cally is a major event for many soft goods retailers and, at least locally, it’s questionable what kind of sales they will see. Movie theaters remain a big question mark, but panelist seems more confident fitness will make a comeback due to pent-up demand to lose the COVID-19 weight gain. Visit our website to view a recorded version of the event and learn more about what industry experts expect. Michelle Z. Askeland maskeland@crej.com 303-623-1148, Ext. 104 COVID-19 creates dichotomy Factors impacting the investment property market Parker Brown Net-lease investors seek credit and essentials Zach Wright 2020 retail investment sales and the road ahead Matt Call and Collin Tedesco Pandemic highlights benefits of relationship lending Jared Wiedmeyer Retail leasing considerations in the interim normal Michael J. DePalma How the COVID-19 era will change retail leases Heather Meek Maximized efficiencies will help food halls survive Justin Croft COVID-19: Tsunami, hurricane or tropical storm? Robert Hudgins Student articles from the University of Denver 4 6 8 10 12 14 15 16 26 Werk Creative Restaurant trends are highlighted on Pages 15 and 16