MIAMI—2017 is right around the corner, and changes are coming. Actually, it would be more accurate to say changes are here and they are coming.

GlobeSt.com caught up with RKF vice chairman Rob Cohen to gest some insights into X factors, urbanization and the Amazon Effect in part one of this exclusive interview. Stay tuned for part two, in which he will discuss demographic shifts and experiential retail.

GlobeSt.com: What is your overarching view of the retail commercial real estate scene in 2017?

Cohen: The retail real estate scene is always affected by global macroeconomic shifts, many of which are subject to broad uncertainties. Contributing to uncertainty are the US presidential election and expectations of a new administration, Brexit and how that will roll out, the Fed's rate-hike plans, and geopolitical situations in Russia, China and North Korea. These will affect both retailers and landlords. Even with all these unknowns, it's important to realize that the investment cycle remains strong, and the labor market is steady.

GlobeSt.com: What impact will urbanization have on the retail real estate industry in 2017? And what are the implications?

Cohen: Urbanization is an ongoing and game-changing opportunity for the retail real estate industry. According to the United Nations, 6.3 billion people will be living in cities by 2050.

These numbers are good for urban markets, for retailers, developers and brokers alike. At the same time, there has been some concern about how to keep cities on a human scale and how to regulate urbanization. What's needed is a sustainable approach, one that meets the needs of people and economies that's careful with the environment. Solutions exist today to make all that possible.

GlobeSt.com: E-commerce is an ongoing issue we discuss. How will this continue to impact retail real estate in 2017?

Cohen: The “Amazon Effect” is a reality. While more than 50% of shoppers will turn to Amazon first in a product search, online retail is still spiking upwards.

That being said, we also know that brick and mortar will continue to be highly relevant as retailers continue to step up their game through products, technology and experiences. Now we are seeing that Amazon is creating physical stores, with its bookstore in Seattle and a plan to open dozens of pop-up stores in shopping centers.

Stores are not disappearing anytime soon. Instead, they are reinventing themselves, creating experiences as part of a trend in “retailtainment”—including food elements and additional services and fun to make the consumer's experience unique. And let's not forget the importance of interactions with in-store salespersons whose expertise is valuable to shoppers.

Instant Insights /

2017 Retail: Uncertainty and the Amazon Effect

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