Post Office Cutbacks Could Spell Opportunity

WASHINGTON, DC-It is clear that the US Postal Service is getting set to significantly downgrade its footprint. The most recent signs are news reports that it plans to approach Congress to ask for legislation that will allow it to lay off 20% of its workforce, or 120,000 workers. These news reports, based on internal documents that have concluded that the service can only afford 425,000 workers by 2015, follow plans the USPS revealed last month to dispose of at least 3,700 retail offices. It also tapped CBRE last month to serve as its exclusive service provider, presumably to help with this process.

The US Postal Service will, at least in part, make up for these lost services by partnering with third-party retailers under a program called Village Post. But make no mistake, warns NYU Schack Institute of Real Estate professor Lawrence Longua: the Postal Service’s retrenchment will have an impact on the real estate community, for both better and worse. “What is happening is that more retail space will be dumped on the market at a time when the retail asset class is shaky,” he tells GlobeSt.com. “This is not good news for the real estate community.” More than likely, he speculates, if the employee cuts do happen they could lead to even more retail store closings than currently expected. Depending on the market, these storefronts may remain empty.