Is Brick & Mortar Retail Back?

Retail has been perhaps the most fluid of all CRE segments over the past decade. With the surge in online shopping (Amazon, anyone?) many retailers have struggled to either modify their sales platform or reduce brick & mortar square footage to reduce expenses, increase margins, and remain relevant in a digital economy.

However, we might be experiencing a shift in this dynamic for the first time in many, many years. In a “Prime” example (pun intended), Amazon has recently rolled-out its newest retail platform: a traditional brick & mortar, storefront concept called “Amazon Four Star”. This will be a limited location concept at the onset, and one of the first locations will be right here in Atlanta at Perimeter Mall, wherein they will sell a variety of products offered on their website, all of which are customer rated 4* and above.

Many big boxes are still struggling, such as Macy’s and JCPenney. But, smaller, forward-thinking retailers are beginning to emerge and are being drawn to dense urban locations and affluent suburban submarkets. Apple Store, Torrid, and Sephora are experiencing phenomenal growth, as are “Junior Anchor” tenants such as Petsmart, Five Below, and Ulta.

Real Estate is obviously cyclical. Perhaps buying habits are, too. It seems more customers are returning to traditional strorefront shopping for certain products types…after all, there is something to be said for test-driving a new phone, a new watch, or the right pair of jeans before you ultimately decide to purchase.