What Are the New Trends of Retailers that are Expanding?
I’ve been recently joking around and saying that the new trending retail uses are the five new “F” words, and people pause, they giggle and then I list them. They are Fitness, Fun, Food, Furniture, and (hahaha) Physicians. Those are the new uses that everyone’s leasing to these days.
Ten years ago, shopping center owners would not lease to more than 15%-20% of their gross leasable area (GLA) to restaurant space because of the parking requirements. Now shopping center owners will lease up to 50% of their shopping centers to restaurants because of the traffic they generate, as long as they have enough parking to support it.
During the global crisis, a lot of people started renovating their homes and kind of hunkering down and nesting, so there’s been a flurry of furniture stores expanding and re-opening. For fun, we’re seeing competitive socializing; ax throwing, Top Golf, escape rooms, trampoline places for kids… Retailers are adding experience too, for example, Khol’s is adding Planet Fitness and Amazon return counters in their stores, and DSW is adding nail salons. I have a local foot massage tenant who’s added meditation. I think we’re going to see many of our retailers who want to stay in business will start adding second and third uses to get the people off their laptops and into their stores.
As baby boomers get older, we’re seeing more hospitals being built, urgent cares and walk-in clinics popping up left and right. These are the physicians…
Then we see boutique fitness, which has been a craze for the last five years, places like Solid Core, Soul Cycle, Pure Barre, and that’s going to continue. What I believe is going to continue more so is mental fitness, and as Gary Vaynerchuk says, there’s going to be a meditation center on every corner, like Starbucks. It’s still physical, but you’re seeing salt baths, oxygen chambers, and stretch zones. So you’re starting to see hardcore fitness shifting into something less hardcore, and I believe we’re going to start seeing it blossom into mental fitness.
A trend that I see is coming is CBD. It’s a huge new use. If a property owner has a mortgage on a property, the lenders are not allowing them. People who don’t have a mortgage on a property can consider leasing to a CBD dispensary. Also, when considering CBD, you have to be careful about your co-tenants and your leases, if they have a “no head shop” clause and how they are defining a dispensary. Five years ago, we saw vape stores pop up and I believe they were hoping to be or were the precursors to CBD stores.
Another trend that we’ve been seeing in the last twelve months is digitally native brands (DNB) or online retailers have opened over 850 brick and mortar stores. We’re starting to see a lot of those start expanding into the ancillary market because they find that their online sales increase approximately 30% when they have brick and mortar stores. Those could range from A to Z in the previous uses.
Lastly, a new trend that has been talked about, based on the gazillion of dollars spent on take-out food and food delivery, are ghost kitchens. The founder of Uber, Travis Kalanick, is creating a concept of ghost kitchens being opened in highly industrial or office-populated areas, where there’s either a caterer or multiple restaurants making food, and Uber delivering food without having people come in.
So there you have it! That’s the five “F” words! What uses are you leasing to that don’t fit into these five categories?
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