COVID-19’s historical mark on the retail industry will be how it energized the move of brick-and-mortar brands into full-blown e-commerce efforts.
“Underlying issues that were visible in retail pre-COVID really came to a head with the onset of the pandemic. Retailers that were on everyone’s watchlist have since filed for bankruptcy,” A&G Real Estate Partners managing director Doug Greenspan told viewers of a recent Turnaround Management Association webinar.
Retailers still in business and planning to thrive in what will become a more omnichannel industry sped up what -- pre-pandemic -- had been longer-term plans to expand their presences on the internet.
“Those that are able to do so successfully are already reaping the dividends. The trend is so pronounced that it is fueling strong pricing for fulfillment space in the industrial sector,” Greenspan said.
Retail will change dramatically because of the pandemic, but funds with cash are ready to buy distressed retail real estate assets and profit as retailers and retail center operators transition into a new era, he remarked.
“To be sure, retailers are going to be closing thousands of locations. It’s going to be tough,” Greenspan said. “But we will see some winners here—smart operators that optimize their real estate to cut costs, improve performance, and position themselves for the new normal to come.”