As U.S. mall owners still grapple with how to fill vacancies from department store chains like Sears and J.C. Penney, redevelopment strategies were a major topic of discussion at the annual ICSC RECon convention held in Las Vegas this week. While there are no "cook cutter" solutions to filling the gaps, apartment complexes and hotels were two of the new uses that some of the biggest retail landlords had top of mind.
The co-working industry continues to grow and evolve throughout the country, and a new high-end concept will open its first-ever U.S. location at an Atlanta mall. Luxury workspace provider No18 has signed a lease at The Shops Buckhead Atlanta and is slated to open in fall 2018. No18 will occupy nearly 32,000 sq. ft. of space at the open-air center that spans six city blocks and features more than 50 stores and restaurants along a streetscape setting.
According to Chain Store Age, No.18 is described as a members club for businesses and will offer a range of curated, flexible workspace options in an upscale, sophisticated environment. No18 members will have access to a members lounge, premium private offices and dedicated desks. All members will be able to take advantage of the concierge-level services, fully equipped meeting rooms, and a luxe event area to host meetings and gatherings.
The country has shown its large appetite for food halls has yet to be satiated. Appealing to the desire for entertaining and interactive experiences in today's retail projects, food halls are exploding in popularity. The open eatery concepts offer an array of choices to satisfy anyone's taste buds and provide communal seating and co-working space for groups to socialize or work on a project. Food halls are a great option for developers looking to drive traffic to their mixed-use project and diversify their offerings.
Between 2015 and 2020, the number of operating major food halls will triple to 300 nationwide, according to a new report on food halls by Cushman & Wakefield. At the end of 2015, when the brokerage began tracking food halls, there were 70 active food hall projects in the U.S., which rose to 86 by the end of 2016 and to 118 at the close of 2017. There should be as many as 190 open by the end of this year, as per the report.
By Jerry Heaton, Senior Managing Consultant, Dallas
March 2018 Update: The battle between Amazon and bricks-and-mortar retail wages on with Toys R Us abruptly announcing plans to close or sell more than 800 stores across the U.S. The impact of Amazon was the basis for the Toys R Us bankruptcy and will leave many big box vacancies coast to coast, putting pressure on market rents, occupancy costs, and diminishing real estate values. My original article below discusses the impact of these retail chain closures and the long-term ramifications upon tax assessors’ property tax rolls. Shopping center landlords will struggle to fill the massive amounts of big box vacancies as shopping trends continue to shift online and retailers move to smaller format spaces.
By Alex Pace, Managing Consultant, Dallas
Mixed-use properties continue to gain popularity in response to the growing desire for the convenience and walkability of urban living. Savvy real estate developers and owners understand that providing a vibrant mix of office and living space, restaurants and retail under one roof allows them to meet – and capitalize on – a variety of consumer needs. While implementing a “live-work-play” concept certainly adds value to a project, the relatively new and complex nature of a mixed-use property is creating valuation challenges for Appraisal Districts that could be costing you.
By Carlos Villatoro, Senior Managing Consultant, Dallas
It is no secret that significant commercial real estate investments continue to pour into the great state of Texas. However, if an owner isn’t lucky enough to receive major tax breaks from local jurisdictions as an incentive to invest here, they will have to accept some of the highest effective property tax rates in the country. The tradeoff is that Texans enjoy a relatively low sales tax rate and zero state income tax rate. Fortunately, the Texas Property Tax Code offers multiple appeal recourse avenues, which allow owners and tenants alike to review the property tax liability from a fair and competitive standpoint.
The number of branches in the U.S. shrank by more than 1,700 in the 12 months ended in June 2017, the biggest decline on record, according to a Wall Street Journal analysis of federal data. Branch numbers fell again in the second half of 2017, as they leave less profitable regions and fewer customers use tellers for routine transactions. That would add to the thousands of locations closed following the financial crisis, and is the longest stretch of closures since the Great Depression.
Narrowing the field from more than 238 applicants, Amazon has announced their top 20 candidates for its second headquarters. When the unusual public contest was announced in September, city officials from across North America submitted proposals boasting potential tax breaks, local benefits and opportunities in an effort to win the $5 billion construction investment and 50,000 new jobs for their city. The list of finalists leans toward locations in the Midwest and South and on the East Coast, and away from the tech-saturated hubs of the West Coast. Many of the finalists, including Dallas, Denver, Raleigh, N.C., and Washington, were considered shoo-ins. More unexpected was Amazon’s selection of Columbus, Ohio; Indianapolis; Nashville; and Miami.
- Industrial activity will continue to thrive. There is no indication of a slowdown in this sector for 2018, says Peter Muoio, chief economist at Ten-X. During the latter part of 2017, new demand drivers, including e-retail warehouse distribution and fulfillment space, cloud computing and facilities for legalized cannabis, supported much of the demand in the segment. However, Muoio expects there to be an increased demand from traditional users of industrial space, such as industrial production companies.