While headlines generally suggest that the future is dim for department stores and big box retailers, the some 37,000 commercial real estate professionals at the world’s largest retail real estate convention under way this week in Las Vegas are feeling relatively upbeat about the outlook for their industry.
“This is a very optimistic show,” says Carmen Austin, a commercial broker with Saurage Rotenberg Commercial Real Estate, who is among the dozens of Baton Rouge real estate professionals attending the International Council of Shopping Center’s 2017 RECon. “Very well attended, with lots of discussion on how retailers can reposition themselves to compete in the age of e-commerce.”
“Big crowds, lots of enthusiasm, lots of deals being made,” says Dottie Tarleton, one of 37 local professionals from Stirling Properties attending the trade show. “My calendar is booked solid with retailers looking to do major deals.”
“Lots of deal making,” agrees Alex Knight, a broker with NAI/Latter & Blum-Donnie Jarreau Real Estate.
That said, it’s too soon to say whether Baton Rouge will land any major retail deals from the show. Jonathan Walker of Maestri-Murrell Commercial Real Estate says most major retailers are only focused on primary markets, and Baton Rouge is considered a secondary or even tertiary market.
For a retailer looking to economize and open several outlets at once, markets like Baton Rouge don’t make a lot of sense, at least not initially, Knight says.
“That makes us kind of a tricky at a show like this,” he says. “At a convention this size, big retailers are pushing to get multiple deals done so it can be difficult to get Baton Rouge on their radar while at the convention. It’s better to make contact and follow up at a later date.”
Baton Rouge is showing up on some radars, however. Austin says she has several investor clients who focus on buying shopping centers in smaller markets and that Baton Rouge is attractive to them. Other local takeaways from RECon:
—Retail isn’t dead; it’s just different. Successful shopping centers are those anchored by grocery stores, service providers and nontraditional users.
—E-commerce is taking a toll on retail sales but not as bad as some reports suggest.
—Food halls are hot.
—A growing number of retailers are using a franchise model, which can make it difficult to attract a new retailer to a market if there’s not already an existing franchisee.
While the upbeat attitude and level of activity might make some attendees optimistic, at least one veteran broker reads the tea leaves a little differently.
“The RECON show is as busy as I’ve seen it, which frankly makes me nervous,” Walker says. “The last time it was this busy was 2007—a year before the bottom fell out.”
—Stephanie Riegel
