The overall consensus for the commercial real estate environment in 2018 is generally optimistic. Many real estate professionals agree that growth will be slow and steady with some pivotal changes to the landscape that are already in motion.

The economy will continue to expand

Experts agree that the economy will continue to expand even though there is a big question mark around whether or not interest rates will rise. The Federal Reserve may not be able to justify high increases in interest rates due to the expectation that job market growth may slow and inflation may continue to be slow.

Goodbye to Big Box Retailers

It’s apparent that 2017 set the stage for more of what’s to come in 2018 for big box commercial retailers. Retail store closings and bankruptcies dramatically increased in 2017. The list of retailers filing for bankruptcy included some of the big guys like Sears, Kmart, J.C. Penney, Toys R Us and The Limited. Walmart has already kicked off 2018 by closing 63 Sam’s Club Stores.

The good news is that there are still many specialty retailers who are expanding during 2018 and on. Consumers want personalized experiences where they can see, touch, taste, feel and hear the items they’re purchasing.  Whether consumers are meeting friends for a bite to eat or checking out the latest technology, retail space will always be relevant. It just might not be as large!

Consumerism Reimagined

Many retailers are being forced to reimagine how they do business. For example, national news outlets are speculating how Walmart will keep up with Amazon.  It has been rumored that they could turn some of their current retail space into distribution centers. But I’m not sure this will be enough for them to keep up. 

Walmart can take a glimpse of what the future of shopping looks like at Amazon Go, Amazon’s cashier-less convenience store. The stores app and an intricate network of cameras are used to track items as they are taken off the shelf and the customers Amazon account is charged as they walk out the door.

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