{"id":1004744487,"date":"2025-01-28T03:52:57","date_gmt":"2025-01-28T11:52:57","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004744487"},"modified":"2025-02-06T05:46:09","modified_gmt":"2025-02-06T13:46:09","slug":"the-new-realities-of-retail-development-design-2025","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/the-new-realities-of-retail-development-design-2025\/","title":{"rendered":"Retail Development Is Bouncing Back, but the Game Has Changed"},"content":{"rendered":"\n

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\"Outside<\/a>
The Bluhawk in Overland Park, Kan., is anchored by a 420,000-square-foot sports and entertainment facility. Image courtesy of JLL<\/em><\/figcaption><\/figure><\/div>\n\n\n

Despite two bumpy decades, retail has demonstrated it\u2019s capable of resilience and innovation. Recent data from PwC and the Urban Land Institute<\/a> shows that vacancy levels are down, and high-growth areas are seeing a surge of demand for lifestyle and retail options. These trends, along with the anticipation that interest rates will remain stable, have engendered a sense of cautious optimism.<\/p>\n\n\n\n

For the savvy retail developer, 2025 holds the promise of opportunity, as long as projects can adapt to new economic realities. And while uncertainty is always a function of the future, the new trends shaping retail development are becoming clearer.<\/p>\n\n\n\n

Building where the people are<\/h2>\n\n\n\n

In the past, a lot more retail developers could buy land, build and assume the customer would follow. Today, higher land and construction costs mean funding a project and squeezing out a profit is more challenging. So, retail developers are increasingly following the people. This has led to the most significant growth in Sun Belt states<\/a> including Florida, Arizona and Texas.<\/p>\n\n\n

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\"Image<\/a>
Todd Caruso, retail investor lead for the Americas, CBRE. Image courtesy of CBRE<\/em><\/figcaption><\/figure><\/div>\n\n\n

Even so, building in a high-growth area isn\u2019t enough. \u201cWhen we first saw lifestyle centers being launched, there was an aspirational mindset that failed to adapt to the realities of a particular area,” said Todd Caruso, retail investor lead for the Americas with CBRE. “There was also a mindset that an architect\u2019s dream of something that worked in California would work just as well in Dallas. Obviously, this simply isn\u2019t cost effective.\u201d<\/p>\n\n\n\n

Instead, sophisticated owners and developers are using location analytics to break down potential markets before they break ground. Using technologies such as geofencing and mass mobile retail analytics, developers can more clearly determine how many square feet a community can support. It also lets them match the format of the space and the mix of tenants that are going to succeed in a specific neighborhood.<\/p>\n\n\n\n

Thinking outside the big box<\/h2>\n\n\n
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\"Headshot<\/a>
John Feeney, senior vice president, The Boulder Group. Image courtesy of The Boulder Group<\/em><\/figcaption><\/figure><\/div>\n\n\n

Even before COVID-19, the industry faced record numbers of retail vacancies and a flood of bankruptcies and mass store closures, hitting aspirational brands the likes of Lord & Taylor and Nieman Marcus, as well as retail stalwarts such as Sears, JCPenney and Toys ‘R’ Us. Instead of aspirational brands, John Feeney, senior vice president at The Boulder Group, sees the industry moving toward brands that focus on both affordability and convenience. <\/p>\n\n\n\n

\u201cWe deal primarily with corporate tenants with strong balance sheets. Standout retailers in the net-lease sector with big expansion plans include Dollar General, TJX Cos. (TJ Maxx, Marshalls, HomeGoods), Dutch Bros and Chipotle,” mentioned Feeney. “As these tenants expand, they continue to target locations where they can offer their customers convenience.\u201d<\/p>\n\n\n

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\"Headshot<\/a>
Ron Bondy, executive vice president of leasing, Midwood Investment & Development. Image courtesy of Midwood Investment & Development<\/em><\/figcaption><\/figure><\/div>\n\n\n

Thinking outside the box store also means that retailers are embracing a mixed-use model that blurs the line between shopping centers and community hubs. And while it may be possible to repurpose existing space, new development offers greater opportunities that may not be otherwise possible.<\/p>\n\n\n\n

“New developments allow for the creation of spaces that speak to the soul of a community and foster social engagement while also meeting the evolving needs of modern retailers and consumers,\u201d thinks Ron Bondy, executive vice president of leasing at Midwood Investment & Development. \u201cThey also offer an opportunity to incorporate cutting-edge design and optimize for sustainability and efficiency.\u201c<\/p>\n\n\n\n

Integrating retail into communities<\/h2>\n\n\n\n

Many retail projects are now linked to residential projects, as many developers assume convenient access to shops and dining can help draw residents. But offering shopping options isn\u2019t enough. Now, many commercial projects include lifestyle options such as medical offices, gyms, workspaces and even sports facilities.<\/p>\n\n\n

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\"Headhsot<\/a>
James Cook, Americas director of retail research, JLL. Image courtesy of JLL<\/em><\/figcaption><\/figure><\/div>\n\n\n

James Cook, Americas director of retail research at JLL, pointed to one example, The Bluhawk in Overland Park, Kan. \u201cIt’s anchored by a huge 420,000-square-foot sports and entertainment complex. With youth sports booming in America, this center is serving an underserved population, parents and families at all-day youth sports events looking to shop and grab a bite while they’re there.\u201d<\/p>\n\n\n\n

Retail developers are also looking at ways to activate their space to ensure the public will want to use it. Whether it\u2019s an open-air trick-or-treating event, serving as the rally point for a 5K charity run or an experience tied to a streaming series, a retail space that’s open to the community and is social-media friendly will benefit from increased traffic and positive word-of-mouth.<\/p>\n\n\n\n

Embracing omnichannel design<\/h2>\n\n\n\n

Online sales have been growing for the past 25 years, with data from the U.S. Federal Reserve showing e-commerce climbing from less than 1 percent of retail sales in 2000 to more than 15 percent by the end of 2023.<\/p>\n\n\n\n

But brick-and-mortar stores are still part of retailer recipes. Shoppers who order items online will often opt for in-person pickup to save time and avoid delivery costs. Having a physical location for product returns and exchanges can develop customer loyalty and give retailers opportunities to up-sell in-store and position themselves for future sales.<\/p>\n\n\n\n

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READ ALSO:<\/strong> What\u2019s in Store for Retail in 2025?<\/a><\/p>\n\n\n\n

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In an omnichannel world, new retail developers have realized that their design approach has to integrate both their e-commerce platforms and their physical locations.<\/p>\n\n\n\n

Omnichannel design starts before the consumer even enters the store. Electric car owners will want charging stations, while those using public transport or rideshares will need dedicated and convenient areas to find their ride.<\/p>\n\n\n\n

Once inside, omnichannel design means that retailers need to offer pick-up and delivery staging areas, curbside pickup and return spots. It also requires seamless integration of e-commerce apps with the store so shoppers can find what they need in less time and with less hassle.<\/p>\n\n\n\n

For lifestyle centers that include restaurants, this also means accommodating the growth of food delivery apps by setting up special parking, entrances and waiting areas for drivers and diners who\u2019d rather get their food to-go.<\/p>\n\n\n\n

New retail development’s cautiously optimistic future<\/h2>\n\n\n\n

There is plenty of opportunity in new retail development, still. However, that optimism has also been tempered by an understanding that retail models of the past need to adapt to a changing consumer landscape.<\/p>\n\n\n\n

As Bondy puts it, \u201cRetailers are not opening as many stores as they did 15 years ago, so the importance of each location as a brand expression is magnified. For landlords, success will hinge on curating tenant mixes that reflect and serve the community\u2019s specific needs and speak to who they are.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

New consumer patterns are reshaping site selection, design and data gathering.<\/p>\n","protected":false},"author":3588,"featured_media":1004744507,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21782,21808,23891,21749,51037],"tags":[32789,32796,47078,52488,32940],"class_list":["post-1004744487","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-development","category-featured","category-national","category-retail","category-trends","tag-cbre","tag-jll","tag-john-feeney","tag-midwood-investment-and-development","tag-the-boulder-group"],"acf":[],"yoast_head":"\nRetail Development Is Bouncing Back, but the Game Has Changed - Commercial Property Executive<\/title>\n<meta name=\"description\" content=\"U.S. retail development is finding its footing, but site selection, design and data analytics have changed due to new consumer patterns.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/the-new-realities-of-retail-development-design-2025\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Retail Development Is Bouncing Back, but the Game Has Changed\" \/>\n<meta property=\"og:description\" content=\"U.S. retail development is finding its footing, but site selection, design and data analytics have changed due to new consumer patterns.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/the-new-realities-of-retail-development-design-2025\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2025-01-28T11:52:57+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-02-06T13:46:09+00:00\" \/>\n<meta name=\"author\" content=\"Jordan Mann\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2025\/01\/Rendering-of-Bluhawk-Plaza-in-Overland-Park-Kansas-edited-e1738069930992.jpg\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/the-new-realities-of-retail-development-design-2025\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/the-new-realities-of-retail-development-design-2025\/\",\"name\":\"Retail Development Is Bouncing Back, but the Game Has Changed - 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