Experts Round-Up: Top Retail Trends to Expect in 2022

Jan 18
Experts Round-Up: Top Retail Trends to Expect in 2022

In our annual tradition, we reached out to a number of retail real estate experts across the country to provide their perspective and insights on what they expect for the retail real estate market and with upcoming retail trends heading in 2022.

The overall sentiment provided by the various retail professionals is positive. In spite of the fact that the pandemic is still ongoing, the experts are feeling increasingly confident about the future of the market in general. Some common themes that resonate throughout the responses are: the strength of the economy, consumer demand, and a “return” to brick-and-mortar sales.

To accompany the insights provided below, we’ve also provided a link to a full Retail Trends Report for 2022 created by Placer.ai. This report covers several data points for different retail brands, including Warby Parker, lululemon, Dick’s Sporting Goods, CVS, Starbucks, McDonald’s and more. The conclude the report with a section titled The Future Is Bright for Offline Retail.

 

Here is what real estate experts say on Retail Trends for 2022:

 

We’re looking forward to continued strong consumer demand driving retail sales upward, continued demand for land and pad sites in the south and southeast.

I also hope to see the supply chain issues and labor shortages stabilize so we can get some relief on construction costs.”

Danny Finkle HFF HeadshotBrenna Wadleigh, CEO, N3 Real Estate

 

There has been a seismic shift in retail overall due to The Pandemic which has amplified online sales. I’m excited to see how the “Digitally Native” companies like Amazon, Warby Parker, Wayfair, etc embrace brick and mortar and how brick and mortar capitalizes on online sales.

The movement from the northeast… especially in the specialty restaurant and fitness industries industries… is really dynamic.

As I stated last year, the failed policies of the northeast US are benefitting Florida in a monumental way… probably the most since the advent of air conditioning or Flagler’s railroad. I think there’s a lot of runway ahead for South Florida and I’m anxious to see what comes next!”

Russel Bornstein ColliersRussell Bornstein, Senior Director- Retail Services, Colliers International

 

2022 is going to bring the focus back to physical retail. The high cost of online customer acquisition and the significant drain on profitability from online returns are both causing retailers to reprioritize bricks and mortar locations.

Digitally native brands will open stores, entrepreneurs will test new concepts, and existing retailers will reimagine their store prototypes. This is the year of the evolution of the store.

I also expect we will see retailers test new markets and locations as they move away from daytime population as a core metric and try to get closer to the consumer. The demand for single tenant real estate both from an investor and tenant perspective will continue to be unbelievably strong as tenants look for real estate solutions that give them enough control to pivot when necessary and investors look for vibrant, in demand asset types with long term viability.

Karly Iacono Marcus & Millichap Headshot 2019Karly Iacono, Senior Vice President, CBRE Capital Markets

 

The South Florida retail market performed remarkably well through the pandemic and is one of the most desirable retail markets in the country. 

With population and employment figures growing at the strongest levels in years, retail occupancy levels exceeding 95%, and new retail construction limited to 0.6% of existing inventory, the ability for landlords to grow rental rates is unprecedented.

Retail rents have grown roughly 4% per year since 2012, but are poised for outsized growth in the coming years.

Danny Finkle HFF HeadshotDanny Finkle, Senior Managing Director, JLL

 

For 2022, I’m most excited about the delivery and introduction of all new residential and office projects throughout South Florida, and seeing the effect these projects have on tenant sales and thus, retail demand.

South Florida has experienced some of the strongest demand nationwide for residential and office product; rents in these sectors have taken off significantly so developers are rushing to add new supply to meet the increased demand.

Retail, which has performed extremely well throughout the pandemic, is the main benefactor of this increase in daytime and overall population. This year and the next few years should make for an extremely favorable market for retail landlords in South Florida.”

Marcos Puente MMG Florida Commercial Real EstateMarcos Puente, Principal, MMG Equity Partners


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