Retail Leasing and Rents Are Rebounding

Retail leasing activity and retail rents are starting to rebound. The trend stems from a combination of new, more experience-focused retail concepts and online retailers transitioning into brick-and-mortar locations. As a result, retail leasing is picking up and retail investors are returning to the market.

“A relatively recent phenomenon is that traditional online retailers are starting to operate physical store locations. Online retailers opening physical locations is a sign of the strength of retail,” Scott Grossfeld, partner at Cox, Castle & Nicholson LLP, tells GlobeSt.com. “These online retailers have recognized the importance of physical stores and they are slowly building out brick-and-mortar footprints, trying to maximize their presence and coverage in the retail industry.”

Amazon is the prime example of online retailers opening physical stores, and it shows the benefits of having a physical presence. “With the abundance of retail space available and withering competition in some categories, the introduction of strong new online retailers in physical locations may well result in a further boon to these businesses,” says Grossfeld. “This new development is also helping to create new leasing activity and accelerate retail absorption.”