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The Return to Brick-and-Mortar

Posted on: March 29, 2019

Are Physical Retail Spaces Coming Back?

It’s true what they say: the pendulum always swings back. And, believe it or not, physical retail spaces may already be on that trajectory.

Brick-and-mortar stores that reigned for decades have slowly been closing their doors across the U.S. It’s becoming evident that retail in the traditional sense can no longer, but that doesn’t mean the storefront is dead. Studies predict a turn in this trend – one that will change but not phase out the commercial retail real estate landscape.

Here are some of the reasons why things may be looking up for commercial retail real estate:

E-commerce Is Becoming More Difficult

E-commerce is generally becoming more competitive. Certainly, there is a battle waging at the multinational level (for example, between Walmart and Amazon), but competition is growing among smaller, independent retailers, too. This means higher advertising costs on social media and more labor involved in selling your brand or product. With quantity and quality available these days, it’s easy to get lost in the shuffle. On top of this, the rise of shipping costs – UPS, for one, is restructuring their price model – is a burden on vendors across the board.

Higher Vacancy Are Causing Lower Prices

While the rise in newspapered storefronts may seem daunting, it could actually be an opportunity for buyers. Because of the increased inventory, and therefore reduced value, this shift in the supply-demand may actually breathe new life into commercial retail real estate. Investors and entrepreneurs see this period as a previously unavailable opportunity to purchase real estate or start a business. South Florida real estate lawyers continue to work with retail building buyers determine the best investment opportunities in the area.

Retailers Are Getting Smarter

At the same time, retailers are getting smarter. Businesses are starting to realize that single-channel sales won’t cut it. In the case of the multinationals, this means might mean opening more or different retail locations as well as selling online. This might be best exemplified by Amazon who recently begun to open its physical retail spaces for books, devices, and other popular merchandise.

While it’s unlikely brick-and-mortar will ever dominate in the same way it used it, there are sure-fire signs of incremental recovery that could offer promising opportunities for prospective investors. If you’re considering investing while the average property price is growing at a slower rate, hire a Fort Lauderdale real estate attorney at Schecter Law at (954) 779-7009 to help you navigate the process.