Retail Midyear Outlook
Retail Market Recovering More Quickly than Expected; Investors Selective But Actively Acquiring Properties
Retail sector poised for growth. Following the upheaval caused by the health crisis, retail property performance is expected to begin realigning with the new realities of space demand. A partial shift to online shopping, the resumption of experience-based retailing, and the reopening will be the primary drivers of property performance. Traffic-generating tenants will remain as a dominate factor for in-line space demand in the coming months as smaller retailers reopen and relocate. Many retail spaces that failed to return to pre-recession strength are expected to be repurposed. A rise in the need for medical office facilities could fill some locations, while other spots may be utilized in the education sector. Larger, outdated retail centers, such as some malls, will be repositioned as distribution centers or razed and redeveloped. Many of these properties are in core locations or near thoroughfares, which will help accelerate reuse.