To be successful in today’s retail space, investors and developers need to adapt to the new risks and challenges that this sector faces. That is according to Joe Derhake, CEO of Partner Engineering & Science.
He recently told GlobeSt.com that technology and changing consumer behavior will change how our cities and buildings are designed. “Those who can anticipate how new developments like driverless cars or even online grocery services may create a risk of building obsolescence can take advantage of great deals or profitable adaptive reuse projects.”
Similarly, he says, there’s a growing shortage of land suitable for development. “Those who are savvy enough to take on Brownfields can do very well in this market.”
Derhake also recently touched on the subject of technology and how they can make real estate assets obsolete. “Amazon has made some retail business plans obsolete, and our regional malls are reeling from this 15-year-old disruptive force. OK, that is old news—what is next?”
One very disruptive—and very exciting—technological development is the advent of driverless cars, which will change the value proposition of many assets, Derhake previously told GlobeSt.com. “For example, self-parking and self-refueling cars will render prime-location gas station and parking lots obsolete, creating lucrative opportunities for adaptive-reuse projects. And our cityscapes will change significantly if parking capacity no longer dictates what can be built. Driverless cars will make commutes more tolerable so that people may start choosing quality over proximity when it comes to locations to live and work. Driverless technology will allow increased capacity of our roads, which may cause the decline of railways and public-transport-related development. To stay ahead, CRE professionals should be thinking about the risks and opportunities such drastic changes present to their portfolios now.”