If you’ve been keeping tabs on recent retail news, chances are you’ve heard several retail brands, Big Lots, Forever 21, Joann Fabrics, Party City, and others, made headlines with closures. Although these closures raise concerns, the truth is that demand for retail space is still high!

In fact, the biggest takeaway from Retail Live Orlando just two weeks ago was the steady expansion of convenience stores, car washes, and coffee shops, sectors that signal ongoing confidence and momentum in the market.

In a recent memo to members, Tom McGhee, CEO of ICSC, outlined that year-to-date vacancy for shopping centers remains at a low 7.9% and announced store openings outpaced announced store closings from 2021 to 2024.

The constraints limiting available retail space go even further than simply store closures and openings; retail development overall has been limited by high interest rates and building costs in recent years.

In fact, 57% of the retail space delivered since 2013 occurred before 2017. Existing retail spaces provide existing infrastructure that can be retrofitted and are often the fastest path for brands to grow, allowing them to capitalize on consumer demand for in-store shopping. 

What can we do as Economic Developers?

Retailers are actively seeking ways to grow, but many are turning to existing spaces to do it. Refitting former big box stores or outdated strip centers can offer the fastest path to market if your community is ready with the right tools. Three immediate questions every economic developer should be asking:

1. Do we have a clear inventory of available retail space?
   • Knowing what’s on the market and the condition it’s in is crucial for attracting interest.
2. What’s our appetite for retail incentives?
   • Deals are expensive. Retailers are doing the math, and if your community can help make the numbers work, you’re ahead of the pack.
3. What’s in our incentive toolbox?
   • Abatements, infrastructure support, expedited permitting, etc., now is the time to evaluate your local options and how they align with today’s retail challenges.

It’s very important to evaluate your community’s appetite for incentives and evaluate what you have available to use in your toolbox. With deals being very expensive, getting a deal to pencil is a challenge. 

What types of Incentives work for Retail-Commercial Development? Here’s a look at some options:

Bottom Line: The demand is there… Consumer interest in in-person retail isn’t going anywhere. Retailers know that. Developers know that. Now it’s about how quickly your community can respond with solutions that are strategic, flexible, and deal-friendly.

WHAT’S ON THE HORIZON?

May 1 – ICSC Local Savannah –
Perry Lane Hotel

Connect with retail real estate professionals of the metropolitan Savannah area at Perry Lane Hotel. Don’t miss this opportunity to shake hands with potential business partners and share ideas on marketplace industry trends and transactions.

Event hours: 4:00 P.M to 7:00 P.M.

Our Manager for Retail-Commercial Development, Daniel Martin, will be moderating a panel with guest Speakers:  Stacy Watson, Georgia Ports Authority, and Dorie Bacon, Regional Rep with the Georgia Department of Economic Development.  Register here:  ICSC LOCAL SAVANNAH | ICSC

June 17 – ECG Retail Roundtable – RESERVE YOUR SEAT!!!

Join us in Sylvester, GA at The Palace Restaurant where we will feature speakers in the commercial real estate industry to enlighten us on the latest in news and trends in the retail space.

Event hours: 10:00 A.M to 2:00 P.M.

To reserve your seat, email Daniel Martin at dmartin@locationgeorgia.com.

Retail Roundtable by invitation and exclusive to ECG Cities.