2024 VIEWPOINT NATIONAL RETAIL REPORT

The retail property sector seems to be leading the way in adapting to the economic disruptions of this decade, perhaps benefitting from having faced challenges earlier than other commercial property types. Integra’s experts note a mix of resilience and challenges present in markets nationwide. Retail is not only shedding non-competitive malls and shopping centers with less hesitation, but there’s also a heightened emphasis on tenancy in sectors experiencing sales growth, such as restaurants, bars, groceries, and health product stores. Surprisingly, under the radar, the retail industry may have weathered the worst of the e-commerce onslaught on market share.

Amidst the widespread discussion of parcel delivery trucks congesting highways, the e-commerce growth trajectory appears to be leveling off. After peaking at a 16.5% sales share in the second quarter of 2020, e-commerce has receded to an average of 14.9%. Rather than following the anticipated exponential growth akin to Moore’s Law, online shopping seems to be following the Sigmoid Curve pattern of a maturing industry. Having harvested the low-hanging retail fruit, it now confronts the formidable challenge of competing with the brick-and-mortar sector, which commands 85% of American shopping.

In the realm of financial support, loans and funding play a crucial role in navigating these shifts. Retailers are increasingly seeking assistance from private lenders to secure the necessary funding to adapt and thrive in this evolving landscape. The dynamic interplay of loan options and private lender involvement is becoming a vital aspect of the retail industry’s response to economic disruptions and changing consumer behaviors.

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