Historic Shift in Retail Property Sector as Big-Box Stores Close and Malls Adapt
- Service-based tenants expected to lease more retail space than goods-based tenants in the coming year
- Store closures outpace openings in retail sector
- JLL predicts 15,000 store closings and 5,800 openings this year
- Grocery stores and discount stores see positive opening trends
- Big-box stores like Party City and Big Lots closing
- Macy’s plans to close 66 department stores, freeing up 12 million square feet of anchor space in malls
- Retailers may face challenges finding desirable locations due to low construction activity
The retail property sector is experiencing a ‘historic shift’ as service-based tenants are expected to lease more retail space than goods-based tenants, according to JLL. Coresight Research predicts 15,000 store closings this year and steady openings at around 5,800. Grocery stores and discount stores see positive opening trends, while big-box stores like Party City and Walgreens close. Macy’s plans to shutter 66 department stores, freeing up 12 million square feet of anchor space in malls. Retailers may face challenges finding desirable locations due to low construction activity.
Factuality Level: 8
Factuality Justification: The article provides accurate information about the shift in the retail property sector towards service-based tenants and the closure of big-box stores. It cites specific examples and includes relevant data from Coresight Research and JLL. However, it lacks a brief introduction or conclusion to summarize the main points.
Noise Level: 4
Noise Justification: The article provides relevant information about the shift in retail property sector towards service-based tenants and the impact of big-box store closures. It also mentions the potential upside of freeing up retail space and possible solutions for mall owners to redevelop or backfill with other businesses. The information is supported by examples and data, making it informative and relevant.
Financial Relevance: Yes
Financial Markets Impacted: Yes
Financial Rating Justification: The article discusses the shift in retail property sector with service-based tenants leasing more retail space than goods-based tenants, store closings and openings forecasts, and the impact on mall owners’ decisions for redevelopment or backfilling anchor spaces. This has financial relevance as it involves companies like Party City, Walgreens, Rite Aid, Macy’s, and impacts retail real estate market.
Presence Of Extreme Event: No
Nature Of Extreme Event: Other
Impact Rating Of The Extreme Event: Minor
Extreme Rating Justification: The article discusses a shift in the retail property sector due to COVID-19 and its impact on store closings, but it does not mention an extreme event happening in the last 48 hours. The situation is considered minor as it’s more of a long-term trend rather than an immediate crisis.
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