Developers: Brick-and-mortar not doomed, but challenged
Commercial real estate developers and investors surveyed this summer by the DLA Piper law firm concurred that reports of the demise of brick-and-mortar are greatly exaggerated.
Only 8% of the 222 respondents to the survey, most of them C-level executives, agreed with the statement that brick-and-mortar is “doomed.” That said, just 3% were of the opinion that traditional retail was here to say.
“Businesses that are vulnerable to the Internet will need to adapt. The weak will die. A lot of real estate will be repositioned,” one respondent told DLA Piper.
Stated another: “Retail needs a brick-and-mortar presence, but there is far more suburban retail than is necessary today. Urban retail still likely has room to grow in specific markets.”
Seven out of 10 of those surveyed indicated they were optimistic that smart retailers would find the right balance between brick-and-mortar and e-commerce. Another 21% felt that mixed-use projects and redevelopment and repositioning of existing shopping centers would help usher retailers into the omnichannel era.
In the meantime, respondents said they expected pop-up stores to become a growing phenomenon for retailers trying out new concepts and center owners looking to fill vacancies.
The biggest disruptor in commercial real estate over the next 12 months will be online retailing’s continued impact on brick-and-mortar, named by 42% of the survey sample.
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