8. Big-Box Vacancies Will Offer Opportunities
“Class-A retail vacancies are very low, and with rising interest rates and the economy most likely slowing in 2019, you will hopefully see better real estate leasing opportunities for national tenants in the next couple of years,” says Ben Terry, vice president of retail brokerage at the Coreland Cos., based in Tustin, Calif.
It will also be interesting to see how developers reposition Sears boxes throughout the country, Terry adds.
“In major metropolitan and suburban markets where prime real estate is hard to come by, you might see theses boxes be torn down and see a combination of multifamily and lifestyle retail shops focused around food, service, fitness and entertainment uses,” Terry says.
Cordero agrees there will be more refurbishment and redevelopment of retail centers, especially with Sears’ stores closures and potential liquidation.
“It opens up a lot of landlords’ plans that they’ve been putting into place to redevelop properties and take their properties into 2019 and beyond,” she notes. However, it will come down to landlords’ ability and willingness to finance redevelopment projects.
The big REITs have the ability to invest, but if they don’t have the willingness, that’s a problem, she says.
“If you’ve got the smaller players, private owners that know they need to reinvest but can’t, that’s a problem,” Cordero adds.