Strip Malls may not Seem Glamorous but They Continue To Feed the Commercial Real Estate Beast
You have, no doubt, driven down the road and stared at the number of strip malls built or being built. How, in the current economic climate, are so many strip malls still under construction? Even with traditional stores like Sears, Toys R Us and Mattress Firm declaring bankruptcy over the past year, strip malls continue to be a boom in retail real estate.
There has been a new trend developing over the past few years when it comes to vacancies in malls. If a store goes out of a business, space may remain empty until a store like Spirit Halloween or other seasonal merchant moves in. Landlords are finding the answers to their growing vacancies may lie in pop-up shops. These are stores that come in for limited periods and then leave. Pop up shops have become popular around the country, as consumers appreciated the narrow window to patronize them. It gives them a sense of urgency and drives sales higher.
Trends come and go, including those in food and shopping. What was once in just last year has become less popular, and business starts to dive. Fortunately for retail real estate, the cycle always begins anew. New trends in food always ensure that vacant restaurant space will get filled by the next big thing. Boutique clothing shops might be a little more challenging to fill in, but somehow many winds up finding new businesses to take up space. One of the most significant trends of late is indoor play places for kids. Trampoline parks, bounce houses, and arcades often find good homes in vacant retail space.
Consumers Drive Business
The location of the strip mall is a major determining factor when it comes to the overall success of the retail center as a whole. A sizeable successful anchor store may help, even in the most remote locations; however, more often, the visibility and signage of the retail real estate play the most significant role in profitability. If tenants leave a poor-performing strip center, the landlord will have a more difficult time filling those spots, even with temporary measures.
Strip malls seem to be thriving in a mixed consumer climate. Retail real estate is still going strong, even though retailers themselves may look like they’re dropping like flies. Survival of some strip malls over others comes down to location, filling vacancies with new concepts and facilitating the pop-up phenomenon. Success in this climate is possible, with some forward-thinking.