Sunday night, Los AngelesMayor Eric Garcetti announced the closure of bars,entertainment venues and fitness centers and restricted restaurantsto take-out and delivery only as a result of the spread ofCOVID-19. The list of restricted retailers will sound familiar tothose in the commercial real estate industry. These are thebusinesses that have driven retail leasing activity and that haveexpanded rapidly in last two years as retail has recovered. Thatwill likely come to a halt as a result of these closures, anddepending on the length of time, could result in the permanentclosure of businesses, particularly mom-and-pop or locally ownedshops.

Each of these segments of retail will be impacted differently.Restaurants have the best chance of making it through, because theyare able to stay in business—and generate revenue—through deliveryand to-go orders. "The majority of businesses have credit linesthat they can draw down from. From the business owners' standpoint,they are leveraging the opportunity to do take-out and delivery,"Chris Maling, principal with AvisonYoung, tells GlobeSt.com.

For entertainment venues, and specifically movie theaters, thetemporary closures could have a major impact, particularly forchains like AMC. "This could be a tipping point for nationalchains. If they are shut down for an extended period of time, theymay not reopen," says Maling. "They will look at survive-abilitygoing forward because this is devastating to their bottom line.Because it is a highly specialized use, it is expensive to replacethe tenant and convert the space into alternate uses."