It’s no surprise that the pandemic has affected retail real estate, and with the significant growth of the e-commerce industry, it’s time to re-evaluate how brick-and-mortar shopping and food services (i.e. coffee shops, bank branches, grocery stores, clothing outlets, etc.) operate effectively in the current landscape.
The Future of Corporate Real Estate
At the 2022 International Council of Shopping Centers convention in Las Vegas, industry experts and analysts discussed the future of corporate real estate and “shop, dine, work & play” environments in a post COVID era.
The national director of retail services and practice groups for Colliers, Anjee Solanki moderated a panel discussion with the president of retail advisory brokerage services, leasing and capital markets for the Americas at JLL, Naveen Jaggi, the chief growth officer for flex operator Industrious, Craig Robinson and the director of restaurants for CBRE, Adam Williamowsky.
“You don’t typically think of play and work at the same time, but what you’ve seen in retail for many years we’re seeing with the office side, which is: If you want people to come back into a physical space, there has to be an experience,” Robinson said. “We’re thinking about how you program things that are experiential, and things that are going to bring people back into your space. … You need some sense about, Why am I going to leave my home and be in this space unless there is a compelling reason? And that’s all about experience.”
Williamowsky stated that modern tech advancements are enhancing and improving “dwell time” measurements — which help track how long customers spend focused in a particular space — and allowing for more interaction with friends and colleagues.
“With dwell time, it’s not necessarily changed things on the full-service side, but, certainly, in the fast casual and mobile ordering, it has certainly been compressed,” Williamowsky said.
Jaggi said restaurants and food services are showing strong recoveries. He explained that before the pandemic, for every $100 a household spent at the grocery store, they would spend $153 dining out. At the height of the pandemic, that effectively dropped to $0 spent eating out as restaurants closed for COVID protocols.
“As of the last six months, we’re at about $120 of eating out for every $100 spent at the grocery store,” Jaggi said. “We haven’t reached the 2019 numbers in terms of eating out. But that’s the direction we’re going. So if you’re thinking about how food factors into a project, just know we are back to eating out. … It’s going to get to the point where it’s $155 to $160 (for every $100 spent at the grocery store) within 12 months.”