Open-air retail real estate is in the headlines again, and for all the right reasons! This article by Kate King in the Wall Street Journal outlines the continued success of strip malls, which have been thriving since the COVID pandemic facilitated the rise of remote and hybrid work.
This is indicative of the changing consumer landscape, especially in the suburbs. Remote and hybrid work models have cut down on long commutes and offered people more flexibility in when and where they choose to shop. King writes, “People who previously drove straight to the office after school drop-off are now grabbing a coffee or running errands on their way home to hop on video calls. Others are visiting FedEx and UPS more frequently to mail back items bought online. And the rise of food-delivery services has increased the desirability of retail that is close to the road and allows drivers quick and easy access.”
The article goes on to bisect the retail real estate industry, focusing on smaller convenience strip malls versus larger grocery-anchored community shopping centers. Just as with grocery-anchored centers, strip malls have seen a confluence of positive trends; vacancy rates are at the “tightest level of supply on record” while asking rents are reaching record highs. Combine this fierce competition for space with low levels of new construction and you get a real estate market where open-air retail real estate is among the best investments you can make.
At DLC, open-air retail is our expertise. Our portfolio includes power centers, grocery-anchored community centers, and local strip malls; all of which have benefitted from the factors outlined above. Take it from the people who have been betting on these assets since 1991 – the success of open-air real estate is here to stay.
Want to learn more about the success of open-air retail real estate? Read our white paper, “A Breath of Open-Air“.