Let the good times for open-air retail roll!
Today’s shifting consumer preferences and challenging capital markets environment have turned commercial real estate on its head. While lenders and investors scour the landscape for the best possible deals, one thing has become clear; not all commercial real estate is created equal, even within a sector.
A recent whitepaper from Placer.AI shows a year-over-year visits comparison for three different types of retail real estate. It shows what we at DLC have been shouting from the rooftops for years. When times are good for indoor and outlet malls they are even better for open-air. When times are bad for indoor and outlet malls, they are not quite so bad for open-air.
Of course, each type of mall has its own role in the retail industry, the white paper from Placer found that the different formats attracted shoppers with varying income levels and diverse shopping habits. But the big winner is open-air centers in the suburbs. By attracting a high-income audience over a large trade area these centers present high-quality investment opportunities that deserve to be recognized.
Placer.ai data for our own properties supports this. This graph shows DLC year-over-year visits in blue compared to a national public shopping mall owner/operator year-over-year visits in red, and the implication is the same.
Real estate is fundamentally a people-based business, and people are flocking to open-air centers for their retail needs.