Neighborhood retail resists e-commerce disruption
The guest argued that neighborhood shopping centers anchored by necessity services remain highly resilient and insulated from e-commerce.
The argument
He noted that centers anchored by grocery stores, drugstores, and local services performed exceptionally well through COVID-19. Furthermore, online grocery sales have stabilized at around 15%, as the majority of consumers still prefer to select fresh goods in person.
The thesis, stress-tested
✓ What validates it
- ✓Albertsons or Walmart reporting stable or declining online grocery mix relative to in-store sales
- ✓Cap rates for neighborhood retail compressing relative to office or industrial assets
▸ Risks discussed
- ▸Anchor tenant relocation can instantly reduce a shopping center's value by 50%
- ▸Shrinking retail floor plates require landlords to adapt to smaller tenant footprints
Hear it yourself
"and was a very short hearing even though they were six months late on paying rent. But did you get them out? No. No. The the judge looked at me directly in the face and said they're trying. They they eventually did catch up. I like them. I didn't wanna evict them. But, you know, it's just a part of real estate where you, like, actually have to show that something's gonna happen. Did you find that it was really interesting to have that looking at the large scale of what everybody else was doing, but then starting the way a lot of real estate investors do on just regular single family homes, house flips."
AFFILIATE LINK · ZORTIX MAY EARN A COMMISSION · NEVER A RECOMMENDATION TO TRADE