Commercial real estate has seen a trend of retail to warehouse conversions emerging in the past few years. Due to the dramatic shift in the retail industry, these conversion projects are becoming increasingly popular all over the country. As the shopping habits of consumers in the United States as changed malls have been closing. It’s estimated that within the next ten years thousands of malls will shut down. Commercial real estate professionals have been adjusting and there is a major spike in the development of warehouses and mixed-use spaces in the place of shopping centers such as malls.
The huge number of store closures has caused many investors to reconsider making investments in retail altogether. This is especially true of investors who are interested in commercial real estate properties. However, both the retail and commercial real estate industries are now being presented with unique opportunities. Old shopping malls containing large amounts of square footage are becoming available to those who want to take advantage of the major shift in consumer behavior.
It makes perfect sense that warehouses and distribution centers could be structured from existing old properties such as malls. Consumers are buying things online and there is a major need for more facilities to handle the number of daily delivery orders. The only significant downside to this conversion venture is that retail properties often are required to be rezoned into industrial listings. Industrustral spaces do not often generate as much in income, sales, or property taxes which can cause surrounding communities to push back.
However, another alternative for these old shopping centers and malls is to convert them into mixed-use spaces. Mixed spaces are becoming popular, not only with commercial real estate companies but also with the communities that they serve. People want to be engaged when they spend money which makes mixed-use space in indoor-outdoor areas incredibly popular. These spaces form a “live, work, play” combination with accessibility and the feeling of community.
In commercial real estate, these mixed-use or lifestyle centers include things such as restaurants, office spaces, retail stores, and condos. Everything is within walking distance from each other and consumers can enjoy walking within a close range of their home while going to a doctor’s appointment or shopping. More people are moving into the suburbs, yet with the feeling of community being created by these mixed-use centers, they can enjoy the closeness to everything that they enjoyed in the city.
There will be things such as lease restrictions and shared workspace details for investors to work out, however, commercial real estate developers will continue to take advantage of the new and interesting opportunities that the retail industry is creating.
This blog was originally published on Jack Nourafshan’s website.