Stone: Stone: Fitness and restaurants do so well because "they offer an in person experience and give people a reason to leave their home, this is something you can’t shop for online." Stone: Fitness and restaurants do so well because “they offer an in person experience and give people a reason to leave their home, this is something you can’t shop for online.”

LOS ANGELES—As retailers lose business to online shopping, gyms and restaurants are beginning to account for a majority of the retail leases today. Max Stone, an associate at Voit Real Estate Services/CORFAC International, says that e-commerce has reduced the tenant pool significantly, with most of his deals—about 90%—with a gym or restaurant.

“There has been a strong demand for fitness and restaurant uses. In fact, about 90% of the tenants that I am working with are for one of those two uses,” Stone tells GlobeSt.com. “The reason why those tenants do so well is because they offer an in person experience and give people a reason to leave their home, this is something you can’t shop for online.”

In certain areas across the county, owners are settling for gym credit in empty big box space. “While gym credit does not usually carry the same value as a national drugstore or grocery store, landlords will settle for these uses to fill empty spaces quickly,” says Stone.

While credit is preferred, consumers are definitely spending money on these smaller, more boutique outlets. For restaurants, Stone says that social media can be helpful in determining the demand and potential traffic, if there are already other locations. “Our main goal is to drive traffic. We value those opinions and we value those reviews,” he says, adding that new restaurants likely haven’t built up a following yet on social media.

In San Diego, where Stone is based, the beer industry is another driver of the retail market. Although there are similar issues with credit worthiness, the high demand and cool-factor of breweries and tasting rooms has helped landlords feel comfortable with the tenancy. “The beer industry really drives our local economy,” says Stone. “These newer pop-up breweries do not always come with strong financial backing and they all seem to do well. Landlords seem willing to forgo the risks with new tenants in lieu of the cool-factor.”

Much of San Diego is undergoing redevelopment, which is also creating opportunities for new and national tenants to enter the market. Many investors are renovating older retail product to attract better tenants. “San Diego is growing rapidly,” says Stone. “Class B and C centers are quickly becoming more attractive to tenants as the low supply of Class A space continues to drive lease rates upwards in a competitive market for tenants.”