One of the most important aspects of finding sustained success as a landlord, commercial real estate developer, or investor is the ability to adapt to trends in the industry. For instance, if you have been developing local shopping centers such as strip malls, you have undoubtedly noticed the fluctuations within that sector over the last couple of years. It is important to understand that you can make significant changes to your retail strip center or mall in response to what the market currently demands. Understanding what you can do to your commercial retail property and why now is the right time to act can help ensure that you experience success in the future.
Why Now is the Time to Redevelop
To maintain success in the commercial real estate space, staying on top or ahead of trends is crucial. Knowing when to renovate your retail center, spruce up the exterior and the right time to bring in new and trendy concepts will help your retail center run at peak performance.
As we seem to be coming out of the COVID-19 pandemic that seemingly shut down the world’s economy, commercial real estate developers who have focused on retail facilities are suddenly in a much better position than they were only 24 months ago. Due to stay-at-home orders, social distancing guidelines, and the boom in work-from-home popularity, many assumed that retail was dying. Companies who had specialized in e-commerce continued to grow in popularity, while retail companies who did not highlight their e-commerce capabilities, suddenly had to adapt. While many economists and other industry experts believed that this spelled the end for retail spaces, the retail sector is now on the rise from the pent-up demand of socializing and in person shopping.
What Does it Mean to Redevelop?
Ultimately, redeveloping a commercial retail space simply means that the developer takes current market trends, industry developments, and other changes into consideration to create a new space and welcoming environment. The COVID-19 pandemic forced many investors, business owners, and others to examine many of their practices, and adapt accordingly. For a commercial real estate developer, this means looking at how the things that consumers are looking for has changed and adjusting accordingly.
What Can You Do with Your Commercial Space?
Redeveloping is about more than converting a retail space into a restaurant within your commercial shopping center. Instead, it is about completely reimagining your existing space in the name of meeting the new needs of your patrons. For example, many companies are planning to allow people to work from home permanently, which has created the need for people to have somewhere to go and work remotely for a few hours. This could mean re-designing common areas to allow outdoor meeting or additional seating areas.
Additionally, commercial real estate developers have also found a budget-friendly means of bringing in new businesses to their retail strip malls. Since many of the companies who were forced to close their doors permanently during the pandemic were restaurants, food trucks are more popular than they’ve ever been before. You can charge food trucks a smaller fee to set up in strategic places around your shopping center, which is attractive to their owners. These dining options are consumer-centric experiences which make your shopping center more attractive to patrons.
Mixed-use developments have also boomed in popularity. There are plenty of ideas that you should consider if you’re looking for a way to redevelop your shopping center.
Why Now is the Right Time to Redevelop
Many retail companies closed their doors for good during the pandemic. For real estate developers who own a retail strip mall, these closures present both a problem and an opportunity. Obviously, having vacant spaces in your shopping center is a negative, as you are no longer generating rent from those spaces. However, when companies are forced to close, you do have the opportunity to convert those spaces into something else and completely redesign your commercial space.
Due to the fact that millions of Americans were forced to spend most of 2020 and part of 2021 isolated, they are now looking for experiences and entertainment. Instead of looking for a place where they can walk into a store and make a singular purchase, they are looking for somewhere that they can make a memory with friends, family, or other loved ones.
While the lockdowns that were such a part of our culture for more than a year did irreparable damage to large sectors of retail, the natural response to those lockdowns have now created a powerful opportunity for commercial real estate developers to redevelop in response. At SCGWest, we are always looking for new ways to reimagine existing spaces, so our clients can realize their maximum profits. To see some of our previous work on redeveloping shopping centers, click here!