Although the shift to online shopping has sped up in the last year or so, brick-and-mortar retail stores are stabilized with an estimate of less than 9% predicted to close by 2026. * The factors causing these remaining closures are not due to pandemic fall-out but most likely to other governmental shifts that are anticipated with the current administration.
So, from a landlord’s perspective, in 2022, essential brands and grocery stores are a solid bet and will continue to provide stable anchors with a look at entrepreneurial businesses filling in the gaps for most neighborhood strip centers. From the investor perspective, the net lease structure will continue to work well and investing in strong anchored centers will be advised in the coming year.
Complimenting these trends in 2022, is the demand for warehouse/industrial space due to the immense increase in e-commerce across the board. The industry experts are estimating more warehouse development projects in 2022 than ever before, as well as record low industrial space vacancies. Retailers of all sizes, from big box giants to independent craftsmen, are driving the growth of distribution centers, not to mention manufacturers will be needing more space as they start holding more inventory to meet the demand for expedited delivery.
*Reference: Marc Rapport with the Motley Fool