Todd Sussman, SVP of retail brokerage at Colliers International. Todd Sussman, SVP of retail brokerage at Colliers International.

LAS VEGAS—“I would expect the retail market to remain strong and gain strength throughout the year. QSR and specialty retailers will gain strength along with top tier warehouse types like Costco.” Those thoughts are according to Todd Sussman, SVP of retail brokerage at Colliers International.

GlobeSt.com was in attendance at the firm’s reception Monday afternoon here at ICSC’s RECon 2016, where Sussman told us that a few leading factors impacting the industry today are a continued growth in investors need to diversify their funds keeps retail franchise growth moving at a fast pace. “Small focused branded businesses are continuing to take available space throughout retail properties,” he says.

Entertainment has been strong for quite some time, he adds, pointing out that more specialized entertainment will continue to grow. “Specialty retailers gain strength and I would expect high end apparel to have a strong year while low end apparel to show little gain in sales.”

What will be interesting to see, according to Sussman, is the results of the plan for a 40,000-square-foot Urban Outfitters/Anthropologie/Free People—the thought is to provide such a diverse and stimulating shopping experience that will excite people to shop more in the store rather than online. “Will this start a trend to bring back the sales to the actual stores rather than online?”

As for the firm’s Stephen Rusher, SVP of retail at the firm? He tells GlobeSt.com that he is optimistic that 2016 will be a strong year for retail although the crystal ball gets hazy too far beyond that.

“We have better fundamentals than the 2008 crash with retailers and landlords making more thoughtful and sustainable deals over the past years,” he says. “If, and more likely when, we see a correction, I expect the blow to be softer and deflationary instead of a crash.”

He continues that “Retail is going to continue to be more and more regionalized with class A markets thriving while secondary and tertiary market will continue to have challenges.” Operations teams are vocal, he points out, and “real estate teams are responding with more deliberate and selective expansion plans, placing a premium on the best markets and projects.”

For Rusher, some leading factors impacting the industry today include macro economic conditions. “We have spent the last five years resetting to sustainable lease rates and justifiable property values so the biggest factor is how much longer the economy will stay on course.”

Rusher also touched on e-commerce, pointing out that there has been a fundamental shift between how retailers are connecting with customers both through their own omni-channel platform as well as 3rd party platforms like Pinterest and Facebook to help promote their products. “Retailers have started to better utilize these channels to customers. In addition, the sharing economy has lowered the barrier of entry for anyone to start a retail business. I can buy wholesale on Alibaba, sell my product on Etsy, ship through UPS, and accept payment through Stripe.”

Mom and pop shops, he adds, a lifeblood for retail centers, no longer need a bricks and mortar store to get started.  They can trial and error online with a very low cost basis.

But one factor that is getting overlooked, in the Bay Area at least, according to Rusher, is rising housing costs and the impact it is having on disposable income.

In San Francisco, Rusher says, housing costs are accounting for 30 to 40% of income. “That is certainly having an effect on disposable income. In addition, companies like AirBnB are having devastating effect on housing stock with investors pushing up home values.”