Real Estate Strategy

How Retail Location Decisions Break When They Outrun Data
How Retail Location Decisions Break When They Outrun Data 1440 428 ASG

Retail location strategy determines more than where stores open. It determines what those stores cost to build, how effectively they can be designed, what lease terms are viable, and whether the portfolio performs as a system or as a collection of individual bets. When site selection decisions are made without visibility into these downstream implications, the result is locations that look correct on a map but create operational friction for years.

The shift from instinct-driven to data-informed site selection has made individual location decisions better. But for multi-location retailers, the challenge is no longer picking good sites. It is governing a portfolio of location decisions so that each one accounts for construction feasibility, design requirements, lease exposure, and competitive positioning simultaneously.

This article examines how consumer behavior data, market analytics, and cross-functional visibility are changing the way retailers approach location strategy at scale.


What Small-Format, Mixed-Use Locations Reveal About Portfolio Strategy

The Bloomie’s concept, roughly 10% the size of a traditional Bloomingdale’s, placed in mixed-use developments with residential and office adjacency, is one example of how format strategy and location strategy are converging. The Fairfax, Virginia location opened in a development center alongside apartments, offices, and complementary retailers, with an integrated food and beverage concept (Colada Shop) designed to extend dwell time.

This format decision has implications beyond real estate. A 10% footprint changes construction scope, fixture requirements, visual merchandising standards, and staffing models. The lease structure for a small-format concept in a mixed-use development differs from a traditional anchor lease in a mall. When these downstream implications are evaluated at the site selection stage rather than discovered after the lease is signed, the format can be replicated predictably. When they are not, each location becomes a custom project.


Why Location Decisions Made in Isolation Create Downstream Risk

Most retailers treat site selection as a real estate function. The real estate team identifies markets, evaluates sites, negotiates leases, and passes the signed deal to construction and design. This linear handoff is where problems start.

A site that looks strong on demographic data may have permitting constraints that add 12 weeks to the construction timeline. A lease that looks favorable on rent may include buildout restrictions that limit design options. A location in an ideal trade area may lack the infrastructure to support the brand’s operational requirements.

These are not real estate failures. They are governance failures. The site selection decision was made without inputs from the functions that will be affected by it. When real estate, construction, design, and lease administration evaluate location decisions together, the portfolio performs differently. Not because the sites are better, but because the decisions are better informed.


How Consumer Behavior Data Changes Site Selection Decisions

Traditional site selection relies on demographic data: population density, household income, age distribution within a trade area radius. This data establishes baseline viability but misses how consumers actually behave in and around a location.

Mobile location data now reveals patterns that demographics cannot: where consumers go before and after visiting a competitor, how far they travel for different retail categories, which corridors they use during different dayparts, and how long they spend in specific locations. These mobility patterns, available from providers such as Placer.ai, SafeGraph, and similar platforms, allow retailers to evaluate a potential site based on actual consumer behavior rather than projected demographics.

The distinction matters. A site with strong demographic alignment but weak mobility patterns (consumers pass through quickly rather than lingering) will underperform a site with moderate demographics but strong dwell-time characteristics. ASG’s Retail Strategy and Analytics practice integrates these behavioral datasets into the site evaluation model so that location decisions account for how consumers use a trade area, not just who lives in it.

 

Key Location Factors That Drive Consumer Engagement

There is poetry in data when viewed correctly. It’s like the lyrics of a song with each verse working together to create something magical. Consider these key elements that drive consumer engagement:

  • Foot traffic and accessibility: Not all traffic holds equal value. High volume without intent can dilute performance, while lower traffic with stronger alignment can outperform expectations. The goal is not just to be seen, but to be encountered at the right moment, when your ideal consumer is most open to engagement.
  • Demographic alignment: Surface-level demographics provide direction, but deeper alignment drives results. Income, age, and household data matter, but lifestyle compatibility matters more. The question is not simply who lives nearby, but whether their daily habits and priorities intersect naturally with your offering.
  • Competition and co-tenancy: Proximity to competitors can sharpen positioning, while complementary neighbors can elevate the entire experience. A café beside a boutique. A fitness studio near wellness retail. These adjacencies create ecosystems rather than isolated transactions.
  • Site visibility and signage: Visibility is not just about being noticed, but about being understood quickly. A storefront must communicate relevance in seconds.
  • Parking and access: Convenience is often the deciding factor between intent and follow-through. Accessibility shapes frequency. If a location integrates seamlessly into existing routines, it becomes habitual. If it requires effort, it becomes occasional.

Together, these elements form the practical foundation of effective retail location strategies. Each factor is a quiet influence on whether a space is merely visited or becomes a favorite destination.

People are actively seeking out communities to find support and belonging. Consumers are finding strength in numbers, and it’s clear that it’s impacting retail. No matter how big or small, brands are re-assessing their efforts to bring a sense of community into their offering. For some it’s sparked an entirely new format strategy, while others have created outlets that bring communities together.


Connecting Location with Consumer Behavior Patterns

Modern retail strategy listens to movement. Not just where people are, but how they flow, and when they choose to linger.

Behavioral data has become a lens through which retail store location decisions gain clarity. Dwell times reveal interest. Mobility patterns expose natural corridors of activity. These insights allow brands to anticipate performance with a precision that once felt impossible.

A location may appear ideal in isolation, but without understanding how consumers behave around it, the picture remains incomplete. Are people passing through quickly or settling into the space? Do they arrive with intent or discover the environment organically?

Retail location strategy today is as much about these patterns as it is about physical geography. Location influences more than revenue potential. A well-placed store does more than just sell. It operates more efficiently and scales more predictably.

How GIS Mapping and Mobility Data Change Site Evaluation

Site selection has shifted from experience-based judgment to evidence-based evaluation, though experience remains essential for interpreting the data. GIS mapping overlays demographic, competitive, and traffic data onto geographic models that identify trade area boundaries, gap markets, and cannibalization risk between existing locations. Predictive models estimate revenue potential based on comparable store performance, adjusted for local market conditions.

These tools have changed how ASG’s Tenant Representation practice operates. Site recommendations are no longer based solely on broker knowledge and market familiarity. They are validated against consumer mobility data, competitive density analysis, and portfolio-level performance benchmarks. When TR identifies a potential site, the analytics practice evaluates whether the consumer behavior patterns in that trade area support the projected performance. And when the analytics suggest a market opportunity, TR evaluates whether the available real estate can support the construction and design requirements at the expected cost.

This bidirectional relationship between Strategy and Analytics and Tenant Representation is an example of the cross-disciplinary model that distinguishes portfolio-level site selection from individual deal evaluation.

How Cross-Functional Data Resolves Location Trade-Offs

Every site selection involves trade-offs. Higher traffic locations cost more. Ideal demographic alignment may come with accessibility constraints. Strong co-tenancy may require lease structures that limit buildout flexibility.

These trade-offs are manageable when the decision-maker has cross-functional visibility. A site that looks expensive on rent becomes viable when construction data shows the space requires minimal buildout. A site with weaker demographics becomes strategic when mobility data shows it captures consumers from a competitor’s underserved trade area. A location with limited signage visibility becomes feasible when the lease terms allow for the exterior modifications needed to establish brand presence.

The discipline is not choosing between competing priorities in the abstract. It is evaluating each trade-off against specific data from real estate, construction, design, and lease administration. When these inputs are available at the site selection stage, trade-offs become informed decisions rather than calculated guesses.

What Post-Opening Data Reveals About Site Selection Quality

Sales against forecast is the baseline metric, but it is not sufficient. A location can meet revenue targets while underperforming on customer acquisition cost, foot traffic conversion, or brand awareness lift. These secondary metrics reveal whether the location is working hard for the results or whether the brand is succeeding despite the location.

Foot traffic conversion (the percentage of passersby who enter) indicates how effectively the site captures its trade area. Customer dwell time and basket composition reveal whether the location is attracting the intended consumer profile. Repeat visit frequency indicates whether the site is building habitual traffic or relying on one-time visits.

ASG’s analytics practice benchmarks these metrics across the portfolio so that site selection criteria can be refined based on actual performance rather than projected performance. Locations that outperform on secondary metrics inform the model for future site selection. Locations that underperform trigger a diagnostic review that evaluates whether the issue is the site, the format, or the execution.

Experiential Retail: A Balancing Act for Profitability and Appeal
Experiential Retail: A Balancing Act for Profitability and Appeal 1440 428 ASG

Experiential retail creates a direct tension for shopping center landlords. Tenants offering interactive, experience-driven concepts attract foot traffic and keep properties relevant. But they often pay lower rents per square foot than traditional retailers, creating a conflict with REIT profitability targets and shareholder expectations.

The question is not whether to bring experiential tenants into the mix. Consumer demand has already answered that. The question is how to structure the tenant portfolio, the lease terms, and the physical space so that experiential retail strengthens the asset rather than diluting its financial performance.

This is a governance challenge as much as a leasing one. Decisions about experiential tenants affect construction budgets (buildouts are often more complex), lease administration (terms are less standardized), and design execution (spaces need to flex). When those decisions are made in isolation, the tradeoffs compound.

Technology Infrastructure Experiential Tenants Actually Require

Experiential tenants typically need more from a space than traditional retailers. AR and VR installations require reliable high-bandwidth connectivity. Interactive digital displays need dedicated power circuits. Mobile integration platforms depend on in-building cellular coverage that many older properties lack.

For landlords, the question is whether to invest in base-building technology infrastructure that supports these requirements or to pass those costs to tenants through TI negotiations. Properties that pre-invest in connectivity, power capacity, and flexible AV infrastructure can attract higher-quality experiential tenants and negotiate stronger lease terms. Properties that do not will find themselves limited to tenants whose concepts require minimal technology, which narrows the experiential mix.

The buildout implications matter. Technology-heavy experiential spaces typically add 15 to 25 percent to construction costs compared to traditional retail buildouts, and the permitting process for interactive installations varies significantly by municipality. These realities need to inform the leasing conversation before the deal is signed, not after.

How Landlords Can Balance Experiential Tenants with REIT Profitability Targets

The tension is straightforward. Experiential tenants attract the foot traffic that keeps a property relevant. But they often generate lower rent per square foot than traditional retailers, creating a direct conflict with the financial performance expectations of publicly traded REITs.

Doug Tilson, who leads ASG’s Tenant Representation, explains:

“The real struggle for landlords is walking this fine line between bringing in the experiential retailers that consumers want, while still meeting the financial goals for their shopping centers. A lot of these locations are publicly traded REITs with profit goals and shareholder expectations they must meet.”

Making the Most of Your Mall Space

How can landlords position themselves to benefit from experiential retail? How do they attract a beneficial combination of retail offerings that keep the traffic coming? Consider these factors:

Strike a Balance
How do landlords marry the need to show profits with less lucrative experiential retail tenants?Tilson explains, “There is significant competition for space, especially in the top-tier shopping centers. So, there is a tradeoff between doing something the customer desires with the constraints of possibly lower returns,” he says. “If an experiential retailer pays less, does the landlord do it for the customer, or do they prioritize the more profitable traditional retailer? My advice: Look at your shopping center as an asset and stay relevant with your consumers. Ignore short-term quarterly earnings and focus on the long-term strategy.”

Curate Your Tenant Mix
Carefully curating the mix of tenants within a shopping center or complex is crucial. Selecting retailers that align with the experiential trend and offer unique, engaging, or interactive elements contributes to the overall appeal of the retail space, but they should not be the only priority.

“We saw this happen in many shopping centers when sit-down restaurants became popular,” says Tilson. “In a number of instances, landlords went overboard and ended up with an imbalance. They must be careful not to overdo any one type of retail. And consumers still want to shop; shopping centers still need traditional retailers. Don’t throw the baby out with the bath water. You still have to have products for consumers to buy, whether or not they have an experiential component to them.”

Embrace New Retailers, but Perform Due Diligence
Just because you may be considering bringing in more experiential retailers doesn’t mean you still shouldn’t perform due diligence. It’s important to maintain fiscal responsibility with new tenants, even if you’re providing more flexibility to the terms of the lease regarding space and scalability. Be sure to address the issue of liability, particularly as it concerns some of the more adventurous experiences.

Use the Fundamentals of Retail Real Estate Strategy
For landlords, consumer expectations may change, but the basic tenets of retail real estate investment have not. (For more, pick up Secrets of Retail Real Estate: How Successful Retailers Win by ASG founder Steve Morris). Location matters. Accessibility matters. The only thing that has really changed is the type of retailer. You’re more likely to have success with a grocery store as an anchor than a department store these days. And you may need to consider more flexible lease and space terms to attract the right kind of retailers to your space.

Embrace Agility
If the pandemic taught retailers anything, it’s that everything can change in an instant. Be agile and willing to change your strategy to suit shifting demand. Where department stores once ruled, it’s more likely your spaces will be filled with DTCs opening physical locations, medical retail, seasonal pop-ups, and experiential retailers. But this shift is an exciting one, because the changing dynamics of your location can be a draw for consumers who are looking forward to what’s next.

Design Stores for Flexibility
Flexibility is a crucial factor in designing retail spaces that attract experiential retailers. Consider allowing retailers to create dynamic and ever-changing environments by offering modular layouts, movable fixtures, and adaptable spaces that can accommodate distinct types of experiences.

Integrate Technology
Incorporating technology into retail spaces is necessary with experiential retail. From augmented reality (AR) and virtual reality (VR) elements to interactive displays and seamless online-offline integration, retail landlords should supply the infrastructure necessary to support these technologies.

Prioritize Sustainability
Embracing sustainability practices can resonate with consumers who are increasingly conscious of environmental issues. Retail landlords can encourage and support eco-friendly practices among their tenants, creating a positive and responsible image for the entire retail space.

Analyze the Data
Leveraging data analytics can help retail landlords understand consumer behavior and preferences. This information can be used to tailor experiences, optimize tenant mixes, and continually adapt the retail environment to meet changing consumer expectations.

Measure Whether Experiential Tenants Are Worth the Rent Discount

Foot traffic alone does not justify a lower rent per square foot. The metrics that matter for landlords are dwell time (how long visitors stay in the center after engaging with the experiential tenant), cross-sale lift (whether adjacent tenants see increased sales on days the experiential space is active), and repeat visit frequency.

Properties with well-positioned experiential tenants typically see measurable increases in overall center dwell time. The question for landlords is whether that increased dwell translates to enough incremental revenue across the tenant mix to offset the lower rent from the experiential space itself. That calculation should be part of the leasing decision, not an afterthought.

First-party data capture is an additional consideration. Experiential tenants that collect customer information through app-based interactions or event registrations generate data that benefits the entire property if the landlord negotiates access as part of the lease terms.

How Lease Terms Need to Change for Experiential Tenants

Traditional net lease structures do not work well for experiential tenants. A concept that invests heavily in experience design and technology buildout needs time to build traffic before it can support market-rate rent. Landlords who insist on standard terms often lose the tenants they most want to attract.

Revenue sharing arrangements give the landlord upside participation while reducing the tenant’s fixed obligation during the ramp-up period. Phased rent increases that align with projected traffic growth let the economics adjust as the concept proves out. And TI allowances for experiential spaces typically need to be higher than traditional retail because the buildout is more complex: specialized electrical, AV infrastructure, and flexible floor plans all add cost.

The key for landlords is to structure these concessions so they are tied to performance milestones. A revenue share that converts to a fixed minimum after 18 months, or a TI allowance that is partially recoverable if the tenant leaves early, protects the asset while giving the experiential concept room to succeed. These are the kinds of structures that Tenant Representation teams negotiate when the landlord’s portfolio strategy and the lease terms are governed together.

Perfectly Positioned

Experiential retail is not going away. Consumer demand for immersive, experience-driven retail environments is increasing, and landlords who ignore it will watch their properties lose relevance. The question is not whether to participate. It is how to govern the process.

The landlords who manage this well treat experiential tenant decisions as portfolio-level strategy, not one-off deals. They connect the leasing decision to the construction implications, the design requirements, and the lease administration complexity that follows. When those connections are made before the deal is signed, experiential retail strengthens the asset. When they are not, every experiential tenant becomes a standalone problem.

Modern Landlords and the Department Store Dilemma
Modern Landlords and the Department Store Dilemma 1440 428 ASG

As traditional department stores grapple with significant losses in a challenging retail landscape, modern landlords should adopt flexible leasing models to remain competitive. To navigate changing consumer preferences, department stores must innovate by investing in technology, enhancing online shopping experiences, and forming strategic partnerships. Success stories from adaptable retailers like Von Maur, Bloomingdale’s, and the unexpected return of Toys “R” Us offer insights into strategies for reinvention.

Department stores have been on a tough journey lately, and a big part of that story revolves around changing consumer behavior and the dynamics of retail real estate. Stores have seen a dip in foot traffic, leading to a struggle to pay the rents demanded by retail landlords.
According to Modern Retail, in just one quarter in 2023, Macy’s recorded $22 million in net losses, Kohl’s profits plunged 60% to $58 million, and Nordstrom’s net sales dropped 8.3%.

But it didn’t always used to be this way.

“Not only did department stores sell everything people needed to clothe themselves and furnish their homes, but they took advantage of the fact that, for the first time, consumers had disposable income. Department stores provided demos, offered lectures, and hosted entertainment events. Shopping was – get the irony here – an experience.”
– Carrie Barclay, President and CEO, ASG

Department Stores Struggle to Keep Up

This history of the department store is a reflection of our culture. But according to Frontier Economics, “the pace of the changes in the last year, including rising costs, channel shift and fast-evolving customer habits, has pushed many department stores to the brink. Even the biggest and best-known brands have faced difficulties. House of Fraser is under new ownership; Debenhams is fighting hard to stay alive; and John Lewis has reduced staff bonuses for the first time in over 60 years.”

Economic shifts and rising operational costs have made it tough for these former retail giants to sustain their traditional models. As a result, we’ve seen closures and restructurings as department stores grapple with these challenges. Meanwhile, shoppers are after more personalized experiences and specialized products, which many department stores find tricky to provide with their one-size-fits-all approach.

This shift in consumer behavior has hit the bottom line for these stores, putting pressure on their ability to keep up with the usual high rents in prime locations.

So, what is a modern landlord to do? Our top advice—be flexible.

Flexibility in leasing department store spaces allows landlords to remain responsive to market demands, attract a wider range of tenants, optimize space utilization, and mitigate risks, ultimately contributing to the overall success and sustainability of department store properties.

What’s Actually Happening to Department Stores?

Many traditional retailers have adapted to the digital age, exploring online sales channels, and implementing innovative strategies to stay competitive. The ones that didn’t are going the way of Kmart, like the following examples.

Bed, Bath, and Beyond
Bed, Bath, and Beyond went from being the retailer on top of the world in the post-economic downturn of 2008 to filing bankruptcy, suing suppliers, and being eaten up by Overstock in 2023. What happened?

The failure is “the result of an increasingly unwieldy corporate structure and its failure to fully reckon with the ascendance of online shopping,” according to the New York Times. In the article, Neil Saunders describes their situation as a death spiral, mostly caused by mishandling of debt.

Bed Bath & Beyond’s stores have closed, but Overstock acquired their intellectual property and took the BBB name in order to “acquire new customers and cement itself as a go-to home goods retailer,” according to CNBC.

Tuesday Morning
Tuesday Morning has closed its remaining 487 stores in 40 states after being approved for bankruptcy. Like Bed, Bath, and Beyond, the company was overextended, and when Wells Fargo increased their cash reserve requirement from $10 million to $30 million, it effectively eliminated any liquidity they had, as explained in a Retail Dive brief.

What Department Stores Can Do to Reinvent

The demise of the department store should be a wake-up call to all retailers to adjust course with the following strategies.

Adapt and Innovate
To survive and thrive, department stores must adapt to evolving consumer preferences. Investing in technology, enhancing the online shopping experience, and incorporating sustainable practices are crucial for staying competitive in today’s market.

The aging Boomer population and the multigenerational increased focus on health has opened doors to medtail, making “retail space a strategic necessity” that has created a dynamic landscape that continues to evolve as both the health care and retail industries face unique challenges.”

Collaborations and Partnerships
Strategic collaborations with popular and emerging brands can breathe new life into department stores. By creating exclusive partnerships or hosting pop-up shops, these stores can attract a diverse range of consumers and generate excitement around their offerings. Grocery stores and beyond are focusing more on consumer values, from sustainable, locally sourced products to products that are committed to protecting the environment.

Focus on Experience
Successful retailers are increasingly focusing on creating memorable in-store experiences. From interactive displays to immersive technologies, department stores must go beyond simple transactions and offer an environment that engages and delights customers.

As we previously reported, “The modern mall is undergoing a remarkable transformation to meet the changing needs and high expectations of today’s consumers. We are excited to be at the forefront, watching how retailers and mall owners embrace innovation, creativity, and technology to reinvent the mall experience. From immersive and experiential offerings to convenient and sustainable practices, the modern mall is poised to become a dynamic and engaging destination that goes beyond traditional retail.”

Contemporary Department Stores Getting it Right

While some department stores have sounded the death nell and others are facing imminent demise, several department stores are demonstrating a level of flexibility and agility that may help them survive in the modern era.

Von Maur
Headquartered in Davenport, Iowa, Von Maur is the parent company of Dry Goods, a women’s contemporary fashion store targeted toward modern young consumers. Von Maur is expanding Dry Goods rapidly, with 11 new store openings in 2023. Von Maur Dry Goods has been in business since 1872 but have managed to reinvent themselves time and again to keep up with consumer demand. Today’s focus is “fashion-forward style meets old-fashioned customer service.”

Bloomingdale’s
It might be surprising to see Bloomingdale’s on the list of hopeful success stories, but they have made some big moves to remain relevant, including appointing a new CEO. Unlike their parent company Macy’s that continues to struggle with relevancy and operational efficiency, Bloomingdale’s shows promise, says GlobalData Retail managing director Neil Saunders, who believes the new CEO’s international connections and experience will benefit the retailer.

In an interview with Modern Retail, Saunders said, “There are good brands in there. There’s a good selection. But really, there needs to be more differentiation. There needs to be more exclusive lines, more young, up-and-coming designers. There needs to be more newness.”

Toys “R” Us in Macy’s
Much to the devastation of generations of kids, Toys “R” Us closed their stores in 2018 and filed for bankruptcy. No one expected the brand to reemerge, but they now have 452 shop-in-shops in Macy’s around the country and have plans to open 24 flagship stores. Their new retail location strategy – air, land, and sea – will see stores opening in airports, on cruise ships, and in strategic locations throughout the U.S.

The Future Belongs to Innovators
“If the high street and the city centre are to survive, these important landmarks must find new ways to become destinations. Otherwise, the city may succumb to the 21st century’s version of retail modernity: the cavernous, windowless, invisible, under-regulated, under-taxed Amazon warehouse.” – Apollo

The state of department stores reflects a broader transformation occurring in retail. While closures of big box, specialty, and legacy stores may signal challenges, they also present opportunities for adaptation and innovation. As the industry continues to evolve, the key to success lies in the ability to embrace change and meet the dynamic needs of today’s discerning consumers.

The Landlord-Tenant Partnership to Save Retail
The Landlord-Tenant Partnership to Save Retail 1440 428 ASG

The loss of specialty retailers, such as Jos. A. Bank, J.Crew, Lord & Taylor, and Pier 1, didn’t just impact the companies themselves. The ripple effect ran through the malls in which they were tenants and indirectly impacted the other mall tenants that relied on their presence as a draw. Many tenants had anchor store requirements that allowed them to renegotiate or even cancel their leases. Unfortunately, landlords are often caught in a tough spot, between tenants who are also trying to survive and must use every leverage point they can, and mortgagers, who require a minimum level of revenue to avoid foreclosure.


Landlords and Tenants Can Work Together to Save Retail

The worst situation for all parties involved would be foreclosure. Landlords and tenants are going to need to find ways to work together. The retail real estate industry must assume a collaborative stand with tenants through these unprecedented times. That doesn’t mean just agreeing to what the tenant wants. Understanding how a tenant makes money and what they can afford to pay is incredibly important. So owners, view your tenants’ requests for assistance as opportunities to strengthen the non-financial aspects of a lease. Reduce co-tenancy requirements, shorten terms, and remove exclusives or other cumbersome items that limit a landlord’s flexibility.


Anchor Stores Need to Change

The downfall and demise of the traditional department store means that anchor stores must change. Given the focus on consumer experience, it makes sense that the anchor stores should be experiential. From hotels and restaurants to gyms and theaters, reimagining retail space is a way forward that can benefit both the landlord and the tenants.

As e-commerce continues to grow, retail investors and tenants are being forced to reconsider what consumers gain from the brick-and-mortar shopping experience. Traditionally, landlord and tenant relationships were ultimately transactional. Today, the sides are teaming up, realizing that together, they can achieve a shopping experience worthy of drawing consumers away from their smart phones and devices. – CBRE


The Future of Mall Space Can Be Exciting and Functional

Elizabeth A. Whitman takes a deep dive into what can be done with retail space in malls that is no longer being taken up by department stores. Temporary options include becoming a vaccination site or converting to warehouse space for last-mile delivery. But long-term solutions are even more exciting in the potential they offer. One mall is transforming its now-empty Sears location into a fitness center with a pool. Another has converted boutique shops into micro-apartments for single tenants. The one common element of all of the reimagined uses of the space is that it recenters the mall as the place where people congregate to live, shop, and have fun – and that’s the key.

We use phrases like ‘omnichannel’ to describe scenarios as though every consumer wants to move seamlessly across everything a retailer, for example, has to offer. However, we have to turn that idea inside out and remember that for consumers it’s all about experience, and always has been. A consumer will choose the experience they want, based on the service or goods they are buying, and then the channel. The businesses that will be rewarded with brand loyalty are those delivering great experiences in stores and online.


Where Do We Go from Here?

Two truths on which we need to remain hyper-focused have come out of this year: One, tenant representation is essential – tenants who had someone capable of navigating, renegotiating, and changing lease terms were more capable of being flexible in meeting their customers’ needs; and two, the adversarial nature of the tenant-landlord relationship needs to transform into a partnership that keeps them all in business. If these things are not achieved, then banks are going to end up owning a lot of empty malls.

How Individual Cities Can Influence Real Estate Investment
How Individual Cities Can Influence Real Estate Investment 1440 428 ASG

Numbers drive virtually everything, especially in real estate. And no investor wants to establish real estate property if the prospects of success are poor. Before committing to any property development, a real estate investor wants data on business growth rate, the resilience of the economy, population size, tax incentives, and other components that are a piece of any retail real estate lease or contract. However, as the landscape of consumer demands becomes more personal, as well as socially mindful, individual cities are now defining the retail real estate market.


Economic size is only one factor.

Global leaders, such as London, New York, and Tokyo, are noteworthy cities in which to invest. Their sheer size and booming economies result in ambitious growth, accounting for a sizable percentage of global real estate investments. However, the markets are known to be cyclical. It’s a fast-paced environment with a sink-or-swim mentality, and not every business is capable of thriving.

Although large cities are attractive to real estate investors, they are far from the only option. Smaller cities captivated by innovation or driven by a niche product offer their own paths to success. Retail real estate is no longer limited to who can open the biggest store or have multiple locations throughout a city. The traditional approach to dominating the market has shifted, and consumers crave something more. Columbus is often the epicenter of retail.


Demographics and local interests matter.

Numbers drive virtually everything, especially in real estate. And no investor wants to establish real estate property if the prospects of success are poor. Before committing to any property development, a real estate investor wants data on business growth rate, the resilience of the economy, population size, tax incentives, and other components that are a piece of any retail real estate lease or contract. However, as the landscape of consumer demands becomes more personal, as well as socially mindful, individual cities are now defining the retail real estate market.


Individual cities have a unique competitive edge.

The cities that are most successful are those that have a distinctive reputation. Size does matter, but it certainly isn’t the only stimulus for achievement in retail. The enterprising mindset of the city itself, regardless of industry, will drive the innovation and unique experiences that consumers want. Peer groups have a significant influence on how a city grows and the retail that thrives, ranging from tourist hubs to entire neighborhoods driven by sustainability practices.

It can be challenging to balance efficiency and innovation, but different cities will demand completely different stores and retail strategies. What functions well in New York City is not guaranteed to launch similarly in Tokyo. A flagship store may do well in the suburbs of Chicago but sink completely in the neighborhoods of Toronto. The demographics of an area can be so specialized that two stores within the same city limits cannot market themselves the same way. Retail real estate must spend less time defining who they are and more time strategizing how they fit into a city’s existing strengths.

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