Physical Retail Stores – Why The Upsurge? | Worth CRE

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Physical Retail Stores – Why The Upsurge?

Commercial Real Estate in College Station Texas

The past decade has been an exciting one for retail, as the improving economy has resulted in increased spending. Much of that spending has happened online, a detail that has led many analysts to suggest that the brick-and-mortar store is dying. While it is true that some companies are seeing the results of this effect and being forced to close certain retail locations, physical retail stores are not actually dying out. What many commercial realtors see happening is a changing retail world.

Some companies are losing their ability to compete offline with so many similar retailers around them; however, other retailers are finding new opportunities in physical stores. Commercial real estate, including retail space, is booming right now.

Goodbye Brick and Mortar Retail?

For a while it has seemed as though the physical storefront would no longer exist. Some giant retailers and mass merchandisers had begun closing stores, only adding to the countless small businesses that were initially affected by the online shopping trend. Some business insiders have even suggested that retail had reached a point where there was no longer a place for the traditional brick-and-mortar store, that everything would happen online, with only warehouses to service and supply these sales. For a while, it seemed as though the retail side of commercial real estate was in trouble.

How Retail Is Changing Today

The market appears to have stabilized and in the last few years, an interesting switch has taken place. While the mega-merchandisers are still losing stores, demand for smaller retail spaces is as strong as it ever was. Now that the hype over how online retail would destroy physical retail is over, people - and commercial investors - are realizing that most of the brick-and-mortar stores are still there… and more are coming!

Analysts studying these trends have found that decreasing retail locations is mostly happening with certain types of retailers, having more to do with how and what they sell, rather than the fact that they are losing business to online sales. As retail has recovered with the economy, so has physical retail, which seems to be functioning hand-in-hand with online retail. Supporting this idea, retail construction has picked up in the last few years and commercial realtors are seeing strong demand for retail space.

Online Retail Is Branching Out

The improving economy is not the only reason for these trends in physical retail space, either. Coincidentally, while some experts previously predicted that online retail would swallow brick-and-mortar stores, what seems to be happening is the exact opposite. Many companies that began as online-only retailers have grown to the point where they are expanding to physical locations.

This supports the concept that physical retail will always exist and also presents great opportunities for investors in commercial real estate. Companies that already have established customer bases present a much lower failure risk than brand new businesses. Some retailers are failing due to their inability to stay current and provide what customers really want.

These changing economic and business times present a great opportunity for investors in commercial real estate. As newer companies seek physical retail locations and offline retail begins to sell online, demand continues to grow. Commercial realtors in many markets suggest that investors learn more about what is trending in retail.  Retailers must not be swayed by the naysayers who have not yet understood that brick-and-mortar retail is not disappearing, it’s just evolving!

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