Moving Through 2024…
July 23, 2024 • As the highly volatile business climate of the past few years transitions into a seemingly more stable “new” normal environment, maintaining high-performance real estate portfolios will continue to require constant vigilance, resilience, agility, and adaptability. Here’s a snapshot of what we’re seeing across different markets nationally.
Health Care in Retail Settings: It’s Complicated
Over the past few months, the growth trajectory of the retail health care sector has taken two steps back and one step forward. Walmart recently announced it is closing all 51 Walmart Health centers nationally. Citing the challenging reimbursement environment and increasing operating costs, Walmart concluded that the care business is not sustainable for them. Walgreens Boots Alliance, while not exiting the sector, is closing 160 VillageMD primary care clinics after suffering Q2 2024 losses of $5.9B. On the other hand, food giant The Kroger Co. announced that its health division is partnering with a primary care physician group to open eight primary care clinics servicing seniors. Amid this evolving landscape, retail leasing to other health care tenants, including urgent care centers and medical spas offering various wellness-related products and services, remains vibrant. Learn more
Industrial Outdoor Storage: A New Niche?
According to Urban Land Magazine, industrial outdoor storage (IOS) sites, formerly known as trailer parking areas, are emerging as a new niche real estate category thanks largely to the key role these sites play in the e-commerce/logistics sector. In addition to parking for e-commerce vans and trucks, these sites are being used to store equipment, raw materials and finished products. Investors, owners, and tenants are all benefiting from the low operating costs these sites offer because there is no building to maintain, repair, or replace, and in some cases, not even a paved parking lot surface. The ideal IOS site is an infill location with access to major population hubs, ports, and distribution routes that enable the site to function as an additional point of transfer between warehouse and households. Learn more
Formula 1 Drives Traffic, Revenue & Value
In 2023, Formula 1 races drove $3B of economic value to Las Vegas, Miami and Austin. The Las Vegas event, held in November, produced an economic impact of nearly $1.5B, surpassing Superbowl LVII. Liberty Media, which owns a controlling interest in Formula 1, invested $1.25B in infrastructure improvements, including the transformation of Las Vegas Boulevard into a state-of-the-art race track, improving miles of other public roads, improvements to public utilities, and the development of a 39-acre parcel near the Strip with a three-story 300,000 sq. ft. pit building. Its public-private partnership with Clark County was critical to the success of the project. Over 316,000 fans attended and spent more than 3 times the amount of money that the typical Las Vegas tourist spends. Learn more
Retail Follows Rooftops to Rural America
As described in ICSC’s recent article National Retailers Aren’t Flying Over Rural America Anymore, increases in net migration to non-metro areas and the growing discretionary purchasing power of their 58 million households is attracting an increasing number of national retailers, including Petco and Lowes. In 2023 Lowes announced plans to open 300 rural or remote stores in the South, Midwest, and Northeast that it expects will be a key component of its operating profit growth. In addition to the population and purchasing power growth that has fueled increased retailer interest in rural communities, retailers are benefitting from economic development incentives that rural municipalities are offering to them as a strategy to attract Millennials and GenZers, whose life-style demands include nearby retailers and restaurants. Learn more
Managing Exclusives & Co-Tenancy Provisions
Please join Ellen Sinreich on October 24, 2024 in Orlando at the ICSC Law Conference for an interactive peer-to-peer session Ellen will be co-hosting: Learning to Play Nicely in the Sandbox: Co-Tenancy and Exclusive Provisions. As retailers continue to expand the scope of their core businesses to remain competitive in the constantly evolving world of retail real estate, there are inevitable clashes when the permitted uses of one tenant overlap with the permitted uses of another. At this session, we will explore best practices for the resolution of conflicts among these tenants regarding their exclusive/protected uses, as well as the need for flexibility in co-tenancy provisions to permit the redevelopment of existing centers. Registration Information
Looking Ahead
Is your leasing process ready to withstand the challenges of today’s evolving “new” normal business environment? Call us today to make sure. You can’t afford not to.