IRVINE, CA—“The doomsayerswere wrong.” So says Rick Chichester, presidentand CEO of locally based Faris Lee Investments, ina newly published white paper “The Case for Retail Investment in a'New Normal' Economy.” Fresh on the heels of an exuberantRECon 2014, where the retail industry was nearlygiddy over its post-recessionary recovery, the white paperlooks to ground that exuberance in facts.

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The doomsayers Chichester referenced were those who declared themall and other shopping venues “on life support.” In fact, whilethere are still challenges ahead for the sector, the paper makes astrong case for retail investment.

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Much of the doomsayers' concern was focused on inroads made byInternet shopping, and as the white paper points out, the web didaccount for 6% of total retail sales last year, “up from around 2%a decade ago."

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To download the complete whitepaper “The Case for Retail Investment in a 'New Normal' Economy,"click here.

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“But retailers that run physical stores, and the properties inwhich they reside, are far from dead,” Chichester states. “Instead,online shopping has improved their productivity and driven greatercreativity.” Spurred on by the new competition, smartretailers “enhanced their online operations,” and created amulti-channel experience web-alone could not replicate. As aresult, the report specified names among the top 20 Internetretailers that also have “a significant brick-and-mortarpresence.”

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In the post-recessionary economy, retail also gains by thetangible nature it shares with all commercial real estate sectors.“There is a comfort and familiarity with commercial real estate,especially in the retail sector,” the paper points out. “Peoplerecognize the tenants in shopping centers and they trust the brandsthat often occupy single-tenant assets.” Facing retirement, BabyBoomers especially gravitate to the stability of real estate as awhole and retail specifically. The white paper compares retailreturns favorably against the S&P and the Dow.

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Part of the shifting retail picture is of course consumer buyinghabits. While the paper indicates that spending has risen everyyear since 2011, much of that is still in needs-based and discountbuying.

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Largely playing into this consumer dynamic, andtherefore what the white paper refers to as the darling ofcommercial real estate, is net lease. “The single-tenant net leasesector is tremendously favorable right now because of its strongdefense against e-commerce,” Chichester says. “The retailers thatgo into these types of properties are nearly always necessitystores or food-oriented enterprises that a consumer can't duplicateonline.”

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In all, Chichester says that right now is, “an excellent time toconsider retail as a wealth creation or portfolio diversificationstrategy.”

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To read the full findings, as well as the impact of therecession on Retail, the new era of financing and the dynamicbetween expansion and new construction, click the buttonbelow.

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John Salustri

John Salustri has covered the commercial real estate industry for nearly 25 years. He was the founding editor of GlobeSt.com, and is a four-time recipient of the Excellence in Journalism award from the National Association of Real Estate Editors.