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NEW YORK CITY-  Theretail market has begun to see a shift as stakeholders buffer theirportfolios in the case of a market downturn. Retail investors havebegun to focus on quality assets that are deemed recession-proof orresistant, such as assets that may include neighborhood locationsthat provide goods and services purchased regularly in person, orproven locations over many years, Brian Watson, CEO of NorthstarCommercial Partners, tellsGlobeSt.com.  

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Because of this fact, larger boxretail and malls not located in prime areas will continue to benegatively impacted as the market appears to move closer to an evengreater online marketplace, which may lead investors to sell largebox retail,  he added. 

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Some destination and proven mallsand galleries will continue to serve as good synergistic areas fortenants to occupy, but dated malls or ones with low traffic countswill continue to underperform, according to Watson. "Retailers mustbe very smart about where they locate, how much space they take,and if other tenants will create synergy for and with them," hesaid. 

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For retail tenants to find theright formula, it may require flexibility in lease terms,commitments and reasonably sized space at affordable terms. Forlandlords, this may require creating a quality synergisticenvironment with positive energy where people want and need toshop, Watson said. 

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"More and more, traditionalretail spaces will be used for marketing purposes, where consumerscan see the brand, visit, touch, interact with some of theproducts, but will most likely buy online," he said. "Consequently,retailers must adjust to how they evaluate their locations, as thetraditional sales per square foot method may not apply."

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Northstar is receiving morebusiness to do with unique retail boutique ideas, shared conceptssuch as "food halls" that have multiple restaurant concepts sharingthe same kitchen or eating area, and unique interactive spaces forfamilies that you can not get online.

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Mariah Brown

Mariah Brown is the New York Bureau Chief and Real Estate Reporter for GlobeSt.com, covering the New York Metro area, Northeast region and national real estate trends. She is responsible for producing multi-media content, including articles, podcasts and video. Before joining the GlobeSt team, she served as a New York Times fellow, reported for the Associated Press in New York and Philadelphia and several other New York City-based outlets.