COMMERCIAL CORNER WHAT’S AHEAD FOR THE COMMERCIAL MARKET THIS YEAR? REALTOR® Alex Ruggieri asks commercial REALTORS® for their insights and projections for the retail, farmland, office and industrial and multifamily sectors. RETAIL Despite Surge in E-commerce, Brick and Mortar Stores Have Staying Power Deena Zimmerman, vice president of SVN|Chicago Commercial
For those of us who focus on retail, it’s no secret the sector has suffered at the hands of e-commerce, which continues to dominate shopping preferences. The trend can be seen with the announcement that Macy’s plans to close 65 stores this year and Sears expects to close 150 stores. For decades, The Limited was a familiar clothing store fixture for women in shopping centers across the country. In mid-January, the company announced it was filing for bankruptcy, thus shuttering roughly 250 stores and its website. In reporting The Limited’s closure plans, a USA Today article noted, “its’ demise reflects a broader struggle by traditional retailers who are struggling to compete against e-commerce powerhouse Amazon and other online retail channels.” So does this mean that those of us who specialize in retail need to panic? Have no fear as technology and Millennial-driven shopping preferences dominate retail, and brick and mortar is here to stay. According to a recent International Council of Shopping Centers study, landlords are reconfiguring their properties to better accommodate popular options such as buying online, picking up in store and allowing more
“Retail will remain among the strongest of the asset classes as the physical and digital retail worlds continue to merge, giving both retailers and landlords unique opportunities for expansion and growth.” — REALTOR® Deena Zimmerman retailers to have shipping and storage operations in their stores to fulfill online orders. Let’s face it, while big box retailers such as Macy’s and Sports Authority are going dark in numerous locations, other retail giants such as Dick’s Sporting Goods, T.J. Maxx and Ulta continue to expand, backfilling many of these shuttered locations. Specialty grocers and fitness users will also be among the retailers that will continue to expand their retail footprint in 2017 and 2018. Another positive sign that brick and mortar retail will continue to grow stronger? E-tailers Bonobos, Fabletics and Warby Parker announced their aggressive plans to expand into physical stores this year. Retail will remain among the strongest of the asset classes as the physical and digital retail worlds continue to merge, giving both retailers and landlords unique opportunities for expansion and growth. 2017 is going to be a banner year!
FARMLAND Outlook for 2017 Land Values in Illinois
Winnie Stortzum, ALC, GRI, ARA, real estate sales/appraiser with Farmers National Company The land market in Illinois peaked in 2014, and land values have been slowly declining since then. Land values follow income, and as profitability has declined over the last couple of years, we’ve seen land values follow suit. Profitability limits the farmer’s ability to pay the same rental rates that they previously paid and landowners accept lower profits as a result. Farm income is likely to
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