1 00:00:00,040 --> 00:00:03,600 Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and 2 00:00:03,680 --> 00:00:08,240 Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. So we 3 00:00:08,240 --> 00:00:10,680 Speaker 1: did get that read on retail sales rising the most 4 00:00:10,720 --> 00:00:13,080 Speaker 1: in ten months, broad based rebound. You really have to 5 00:00:13,080 --> 00:00:15,520 Speaker 1: dig that into the details to understand because otto was 6 00:00:15,560 --> 00:00:18,759 Speaker 1: a big part and furniture among the biggest gains. Let's 7 00:00:18,760 --> 00:00:21,680 Speaker 1: talk about let's talk a little bit about US retail 8 00:00:21,960 --> 00:00:25,760 Speaker 1: from a real estate perspective. Joining us now is Angie 9 00:00:25,800 --> 00:00:28,880 Speaker 1: salon Ki, National director of US Retail at call Yers, 10 00:00:28,960 --> 00:00:33,479 Speaker 1: the commercial real estate brokerage services firm. How are you on. 11 00:00:34,000 --> 00:00:36,760 Speaker 1: Good to have you on the show. Thank you so much. 12 00:00:36,800 --> 00:00:38,919 Speaker 1: It's great to be on the show with you. So 13 00:00:39,159 --> 00:00:41,000 Speaker 1: just give us an update right now on how things 14 00:00:41,040 --> 00:00:43,319 Speaker 1: are going around the country. We like to check in 15 00:00:43,479 --> 00:00:46,200 Speaker 1: with call Yer's pretty much once a quarter to get 16 00:00:46,200 --> 00:00:49,239 Speaker 1: the temperature of what's going on when it comes to 17 00:00:50,240 --> 00:00:52,800 Speaker 1: commercial real estate and and and where things are. How 18 00:00:52,800 --> 00:00:56,080 Speaker 1: would you characterize foot traffic and and and the temperature 19 00:00:56,240 --> 00:01:00,440 Speaker 1: compared with pre pandemic. Yeah, that's a great question. Intense 20 00:01:00,480 --> 00:01:03,840 Speaker 1: though the retail sector definitely has seen a nice kickoff 21 00:01:03,880 --> 00:01:09,080 Speaker 1: ino and nevertheless we're still spending mostly due to the 22 00:01:09,120 --> 00:01:14,480 Speaker 1: transfer of spend from services to products. Entertainment and leisure 23 00:01:14,760 --> 00:01:18,040 Speaker 1: are still not back to normal. Fully, the great news 24 00:01:18,040 --> 00:01:21,480 Speaker 1: that we're seeing when it comes to retail is really 25 00:01:21,640 --> 00:01:26,000 Speaker 1: around the absorption. So roughly seventy six point finally in 26 00:01:26,080 --> 00:01:29,920 Speaker 1: square feet of space has been absorbed since the end 27 00:01:30,000 --> 00:01:33,240 Speaker 1: of one, which is the highest figure recorded since twenty 28 00:01:33,360 --> 00:01:37,160 Speaker 1: What does that mean? So basically what we're seeing is 29 00:01:37,440 --> 00:01:41,440 Speaker 1: UH store openings are actually outpacing store closures and it's 30 00:01:41,480 --> 00:01:45,240 Speaker 1: great to see that because it's become quite dynamic. Retail 31 00:01:45,440 --> 00:01:52,800 Speaker 1: has definitely morphed into traditional retail to non traditional retailers expanding, 32 00:01:52,920 --> 00:01:57,280 Speaker 1: so a lot of wellness, healthcare medtail retail that we 33 00:01:57,400 --> 00:02:02,280 Speaker 1: call it UM expanding into a lot of their retail developments. 34 00:02:02,280 --> 00:02:06,480 Speaker 1: So you're starting to see this integration which has been fantastic. Also, 35 00:02:06,920 --> 00:02:14,480 Speaker 1: is it sticky? Is it? Says? Yeah? Yeah, yeah, most definitely. Um. Look, 36 00:02:14,560 --> 00:02:17,640 Speaker 1: we have all looked at, you know, convenience as being 37 00:02:18,000 --> 00:02:21,520 Speaker 1: a primary factor right especially right now where we have 38 00:02:21,639 --> 00:02:25,000 Speaker 1: been working remotely, working from home, trying to kind of 39 00:02:25,360 --> 00:02:27,960 Speaker 1: um you know, work from home, but also you know 40 00:02:28,240 --> 00:02:32,480 Speaker 1: have family and UH and and kids still sometimes work, 41 00:02:32,800 --> 00:02:34,840 Speaker 1: staying at home, and going back to school. So this 42 00:02:35,000 --> 00:02:39,560 Speaker 1: convergence is really starting to create a pure factor of convenience. 43 00:02:39,720 --> 00:02:42,919 Speaker 1: If I can go to a shopping center and take 44 00:02:43,000 --> 00:02:45,440 Speaker 1: my pet and have my pet, you know, go to 45 00:02:45,480 --> 00:02:49,640 Speaker 1: the veterin area, the new modern that's uh concepts we're seeing, 46 00:02:49,919 --> 00:02:53,960 Speaker 1: or going to a a medical um, you know, clinic 47 00:02:54,280 --> 00:02:57,639 Speaker 1: at a shopping center and then go grocery shopping right after. Hey, 48 00:02:57,680 --> 00:03:00,520 Speaker 1: it's all about convenience and about time, all right, So 49 00:03:00,720 --> 00:03:03,800 Speaker 1: where's the dead space? Where's the space that's not coming back? 50 00:03:05,720 --> 00:03:07,680 Speaker 1: So a lot of the space. So one thing that 51 00:03:07,800 --> 00:03:10,000 Speaker 1: was really fascinating we were looking at some of the 52 00:03:10,120 --> 00:03:14,040 Speaker 1: stats with I C, S C, and you know, overall 53 00:03:14,360 --> 00:03:20,120 Speaker 1: occupancy is hovered around n UM. So the dead space 54 00:03:20,280 --> 00:03:23,240 Speaker 1: that we're starting to see is going to be in 55 00:03:23,360 --> 00:03:26,280 Speaker 1: maybe some of those markets where you had product that 56 00:03:26,480 --> 00:03:30,880 Speaker 1: was already you know uh C and d B minus 57 00:03:31,000 --> 00:03:35,160 Speaker 1: retail that really never came back regardless of the pandemic. 58 00:03:35,440 --> 00:03:39,200 Speaker 1: Those are the spaces that are are still lingering out there. 59 00:03:39,240 --> 00:03:43,080 Speaker 1: But we're also seeing new concepts taking some of those spaces, 60 00:03:43,400 --> 00:03:48,760 Speaker 1: i e. As warehouse space, UM because there's uh, you know, 61 00:03:49,240 --> 00:03:53,720 Speaker 1: there's a need in demand still for that last mile. 62 00:03:54,600 --> 00:03:57,920 Speaker 1: And Jeff heard you talk a lot about health care services, biotech, 63 00:03:58,600 --> 00:04:01,840 Speaker 1: uh and the idea of offering services that you know 64 00:04:02,280 --> 00:04:05,240 Speaker 1: can't really be replicated online at this point. How much 65 00:04:05,240 --> 00:04:07,240 Speaker 1: of an area of growth is that for for retail 66 00:04:07,240 --> 00:04:11,080 Speaker 1: space right now? Oh gosh. In terms of numbers, this 67 00:04:11,200 --> 00:04:13,320 Speaker 1: is just a pure estimate, we haven't really callied it, 68 00:04:13,360 --> 00:04:15,560 Speaker 1: but I would say that when you look at an 69 00:04:15,600 --> 00:04:18,719 Speaker 1: average shopping center that's roughly let's say, you know, two 70 00:04:18,760 --> 00:04:22,040 Speaker 1: hundred thousand to three d thousand square feet, we're looking 71 00:04:22,120 --> 00:04:26,400 Speaker 1: at you know, um medtail retail and medical retail coming 72 00:04:26,520 --> 00:04:31,640 Speaker 1: in and probably taking you know, five of that space. 73 00:04:32,040 --> 00:04:35,000 Speaker 1: So it's a pretty significant amount. Um So, the larger 74 00:04:35,160 --> 00:04:37,320 Speaker 1: the square footage of the shopping center, the higher that 75 00:04:37,400 --> 00:04:41,000 Speaker 1: number maybe, but that's you know, we're looking at you know, 76 00:04:41,240 --> 00:04:47,559 Speaker 1: uh wellness, healthcare, um uh mental wellness. There's a lot 77 00:04:47,640 --> 00:04:51,880 Speaker 1: of different concepts that are coming out. Yea, hey, listen 78 00:04:52,720 --> 00:04:54,920 Speaker 1: on State, sit tire for a second. We've got to 79 00:04:54,960 --> 00:04:56,240 Speaker 1: do a little bit of news, but we'll come back. 80 00:04:56,600 --> 00:04:59,720 Speaker 1: Get back to Angie solon Ki's national director of us 81 00:04:59,800 --> 00:05:04,040 Speaker 1: RETA Colliers. They're publicly held real estate services and investment 82 00:05:04,080 --> 00:05:06,719 Speaker 1: management firm. They've got about fifty one billion in assets 83 00:05:06,760 --> 00:05:09,839 Speaker 1: under management global, so they see real estate all the 84 00:05:09,839 --> 00:05:12,000 Speaker 1: different verticals, and of course we're talking retail here, and 85 00:05:12,000 --> 00:05:13,240 Speaker 1: that's really what I want to hit on when we 86 00:05:13,279 --> 00:05:15,680 Speaker 1: come back, you know, talk a little bit about the 87 00:05:15,680 --> 00:05:17,200 Speaker 1: differences between the U S and other parts of the 88 00:05:17,200 --> 00:05:19,480 Speaker 1: world as we see the pandemic ceasing in some areas. 89 00:05:19,520 --> 00:05:21,720 Speaker 1: Good point a siding, Maybe I should say, yeah, well, 90 00:05:21,880 --> 00:05:24,040 Speaker 1: right now, right fingers crossed, I want to get back 91 00:05:24,080 --> 00:05:26,920 Speaker 1: to our guest on g. Salon Ki. She's National director 92 00:05:27,040 --> 00:05:30,000 Speaker 1: of US Retail at Colliers Uh you know them, well, 93 00:05:30,040 --> 00:05:33,320 Speaker 1: publicly held real estate services and investment management firm, and 94 00:05:33,400 --> 00:05:35,680 Speaker 1: she's still with us on the phone in San Francisco, 95 00:05:35,880 --> 00:05:37,800 Speaker 1: and I wanted to I know you that you oversee 96 00:05:37,920 --> 00:05:40,359 Speaker 1: national you're the national director for US Retail, but I 97 00:05:40,400 --> 00:05:42,600 Speaker 1: want to call yours is a global operations So I 98 00:05:42,600 --> 00:05:44,680 Speaker 1: want to get an understanding of what's happening around the 99 00:05:44,680 --> 00:05:47,320 Speaker 1: world right now. How would you characterize the different pace 100 00:05:47,480 --> 00:05:52,960 Speaker 1: that other parts of the world are leaving this pandemic hopefully, 101 00:05:53,000 --> 00:05:56,479 Speaker 1: I mean, what is the data telling you? Yeah, what's 102 00:05:56,480 --> 00:05:59,240 Speaker 1: really interesting is if we stop and look at the 103 00:05:59,320 --> 00:06:03,240 Speaker 1: different countries in terms of omni channel, And so when 104 00:06:03,279 --> 00:06:08,039 Speaker 1: we looked at the omni channel percentage change year over year, 105 00:06:08,080 --> 00:06:11,080 Speaker 1: you're looking at anywhere from three to five percent increase 106 00:06:11,120 --> 00:06:14,960 Speaker 1: in terms of UM countries adopting the omni channel, which 107 00:06:15,000 --> 00:06:19,960 Speaker 1: in effect really is helping the overall UM consumer economy 108 00:06:20,000 --> 00:06:23,520 Speaker 1: the revenues for retailers, etcetera. And what I mean by 109 00:06:23,560 --> 00:06:28,039 Speaker 1: that is UM. For example, we're seeing fast food chains 110 00:06:28,200 --> 00:06:32,240 Speaker 1: who are reporting revenue growth from digital orders, making up 111 00:06:32,320 --> 00:06:36,839 Speaker 1: one third of some of the company's global sales. But 112 00:06:36,960 --> 00:06:39,320 Speaker 1: is that so is that pandemic or you think that 113 00:06:39,400 --> 00:06:42,880 Speaker 1: stuff that sticks? I think that's going to stick, because 114 00:06:42,920 --> 00:06:46,080 Speaker 1: again it goes back to conveniences. So whether you're going 115 00:06:46,120 --> 00:06:50,719 Speaker 1: back into the office and you're accustomed to ordering online 116 00:06:50,760 --> 00:06:55,800 Speaker 1: for certain certain feed goods or fast food lunches, et cetera. UM, 117 00:06:55,839 --> 00:06:58,359 Speaker 1: I think that's going to continue. So one thing I 118 00:06:58,360 --> 00:06:59,760 Speaker 1: want to ask you, Tim and I. If we walk 119 00:06:59,800 --> 00:07:04,760 Speaker 1: out the door of Bloomberg headquarters, there is available space. 120 00:07:04,800 --> 00:07:07,800 Speaker 1: I think at least two spots across the way on 121 00:07:07,839 --> 00:07:11,360 Speaker 1: the corner there used to be the container store. There 122 00:07:11,440 --> 00:07:14,240 Speaker 1: was a Starbucks in our building at a Starbucks they're 123 00:07:14,280 --> 00:07:17,000 Speaker 1: both gone, and the container store had a pretty big space. 124 00:07:17,040 --> 00:07:19,080 Speaker 1: I mean, there's a lot of open spots as you 125 00:07:19,120 --> 00:07:23,040 Speaker 1: walk around, and that's just our block. So help me 126 00:07:23,120 --> 00:07:26,240 Speaker 1: out regionally, you know, Tim was just asking you a 127 00:07:26,240 --> 00:07:30,440 Speaker 1: global perspective question, but I do wonder it does feel 128 00:07:30,440 --> 00:07:32,440 Speaker 1: like there's some really rough spots when it comes to 129 00:07:32,480 --> 00:07:34,800 Speaker 1: retail and real estate. And then of course there's the 130 00:07:34,800 --> 00:07:37,560 Speaker 1: American Mall across the way that continues to kind of 131 00:07:37,600 --> 00:07:39,440 Speaker 1: figure out its way. I mean, that's kind of a 132 00:07:39,480 --> 00:07:42,920 Speaker 1: special case, but it's been a special case with a 133 00:07:42,960 --> 00:07:47,400 Speaker 1: lot of you know, years of tough times. Sure, sure, no, 134 00:07:47,600 --> 00:07:51,280 Speaker 1: I would definitely agree that in certain markets where we 135 00:07:51,320 --> 00:07:56,760 Speaker 1: have uh, you know, dense urban um you know areas, 136 00:07:57,000 --> 00:07:59,600 Speaker 1: those areas definitely are we're going to see a slower 137 00:08:00,280 --> 00:08:05,840 Speaker 1: growth back to you know, higher occupancies, et cetera. But 138 00:08:05,920 --> 00:08:08,480 Speaker 1: the positive news on that is that although we are 139 00:08:08,480 --> 00:08:12,440 Speaker 1: seeing these vacancies in various sizes, we're starting to see 140 00:08:12,800 --> 00:08:17,680 Speaker 1: the retailers coming back to tour these markets. So what 141 00:08:17,720 --> 00:08:19,560 Speaker 1: we're seeing is that they're coming in, they're touring the 142 00:08:19,600 --> 00:08:23,080 Speaker 1: markets because they're ready to start staging and identifying space 143 00:08:23,600 --> 00:08:28,120 Speaker 1: to reopen um. It may most likely be a different concept. 144 00:08:28,160 --> 00:08:30,960 Speaker 1: It might be a larger or smaller concept. It might 145 00:08:31,000 --> 00:08:35,959 Speaker 1: be you know, that container storm might convert into multiple stores. 146 00:08:36,240 --> 00:08:40,400 Speaker 1: But we are seeing tour activity from retailers start to 147 00:08:40,480 --> 00:08:44,520 Speaker 1: peak up again, and this is from global brain. So 148 00:08:45,000 --> 00:08:48,000 Speaker 1: I'm wondering about the permanent shift that we see on 149 00:08:48,040 --> 00:08:52,480 Speaker 1: the other side of this pandemic. What fundamentally changes when 150 00:08:52,520 --> 00:08:55,240 Speaker 1: it comes to commercial real estate, when it comes to occupancy, 151 00:08:55,280 --> 00:08:58,720 Speaker 1: when it comes to who and what is occupying these spaces. 152 00:09:02,040 --> 00:09:04,880 Speaker 1: So I would say from a forecast perspective, there are 153 00:09:04,960 --> 00:09:09,120 Speaker 1: still those outside influences, right, and that means, you know, 154 00:09:09,240 --> 00:09:12,760 Speaker 1: when we start to see you know, the inflation UM 155 00:09:12,800 --> 00:09:18,079 Speaker 1: margins for retailers UM starting to creep back up if 156 00:09:18,120 --> 00:09:22,040 Speaker 1: they're not normalizing hopefully by by um, you know, the 157 00:09:22,080 --> 00:09:25,800 Speaker 1: summer of this year. But we're also starting to see UM, 158 00:09:25,840 --> 00:09:30,199 Speaker 1: you know, retailers take some of the capital that they've 159 00:09:30,280 --> 00:09:33,760 Speaker 1: harvested UM and as you probably have seen some of 160 00:09:33,800 --> 00:09:37,959 Speaker 1: the you know call it top um, you know, piered 161 00:09:38,040 --> 00:09:42,480 Speaker 1: retailers are definitely starting to take their capital that they've 162 00:09:42,520 --> 00:09:48,800 Speaker 1: harvested and put it back into either remodeling stores, making 163 00:09:48,880 --> 00:09:53,240 Speaker 1: stores more efficient operationally, where they're you know, looking at 164 00:09:53,360 --> 00:09:56,320 Speaker 1: the point of sale where it's directly done by the 165 00:09:56,360 --> 00:10:01,080 Speaker 1: consumer themselves. Uh So there's new technolog AG NEWS systems 166 00:10:01,080 --> 00:10:03,960 Speaker 1: that are starting to come back in and be deployed, 167 00:10:04,360 --> 00:10:07,880 Speaker 1: and through that effort, we will start to see the 168 00:10:08,000 --> 00:10:13,640 Speaker 1: opportunity for retailers to basically take on more retail but 169 00:10:13,760 --> 00:10:16,600 Speaker 1: maybe at a smaller footprint, or they're going to be 170 00:10:16,720 --> 00:10:20,720 Speaker 1: more operationally more optimized, so they're letting they're able to 171 00:10:20,760 --> 00:10:25,320 Speaker 1: start reinvesting capital in more that omni channel approve. So, Angie, 172 00:10:25,440 --> 00:10:28,800 Speaker 1: I'm just thinking about our audience UM in terms of 173 00:10:29,360 --> 00:10:32,440 Speaker 1: investors thinking about the real estate real estate space, I 174 00:10:32,440 --> 00:10:35,880 Speaker 1: do think, you know, we've all expected some real fallout, 175 00:10:36,200 --> 00:10:38,880 Speaker 1: significant fallout because of the pandemic, but it does seem 176 00:10:38,920 --> 00:10:42,880 Speaker 1: like there's been a reallocation and somehow for the most 177 00:10:42,920 --> 00:10:46,240 Speaker 1: part getting through. What do you think our investment audience 178 00:10:46,320 --> 00:10:49,440 Speaker 1: needs to understand about what you are seeing when it 179 00:10:49,480 --> 00:10:54,080 Speaker 1: comes to US retail space in particular. Yeah, I would 180 00:10:54,080 --> 00:10:56,920 Speaker 1: say that from a capital market's outlook, from an investors 181 00:10:56,920 --> 00:11:00,240 Speaker 1: investors are actually coming back into the retail space UM, 182 00:11:00,280 --> 00:11:04,120 Speaker 1: and we're actually seeing that, you know, in UM based 183 00:11:04,120 --> 00:11:07,559 Speaker 1: on fourth quarter sales and this is actual sales of 184 00:11:07,640 --> 00:11:12,640 Speaker 1: shopping center that the fourth quarter actually accounted for a 185 00:11:12,720 --> 00:11:18,160 Speaker 1: roughlyent of total sales for the year, and that for 186 00:11:18,240 --> 00:11:21,600 Speaker 1: the year's sales total about was eighty four billion dollars. 187 00:11:21,640 --> 00:11:25,200 Speaker 1: So we're actually forecasting pretty strong and ay growth in 188 00:11:25,200 --> 00:11:29,079 Speaker 1: the next five years from a retail pricing perspective, UM 189 00:11:29,080 --> 00:11:33,439 Speaker 1: reaching somewhere in the range of five in two. It's 190 00:11:33,480 --> 00:11:37,960 Speaker 1: possibly going to be the largest increase in value since UM. 191 00:11:38,080 --> 00:11:42,240 Speaker 1: Of course that's oriented in around grocery anchored shopping centers. 192 00:11:42,480 --> 00:11:45,880 Speaker 1: But we're going to continue to see that optimism come 193 00:11:45,920 --> 00:11:47,960 Speaker 1: back and that starts that will start to come back 194 00:11:48,000 --> 00:11:51,160 Speaker 1: in terms of the urban core retail market. In addition 195 00:11:51,200 --> 00:11:53,840 Speaker 1: to that, we're also seeing a lift in loosing activity 196 00:11:54,320 --> 00:11:57,319 Speaker 1: in retail overall. Andy, what are the shifts that you're 197 00:11:57,320 --> 00:12:00,160 Speaker 1: seeing when it comes to where people are working. You're 198 00:12:00,200 --> 00:12:02,320 Speaker 1: just talking during the break about Eric Adams, the mayor 199 00:12:02,320 --> 00:12:04,280 Speaker 1: of New York, telling people that it's time to come 200 00:12:04,320 --> 00:12:07,080 Speaker 1: back to work. UM in thirty seconds, are what are 201 00:12:07,120 --> 00:12:09,760 Speaker 1: the patterns that you're seeing in the US in different cities. 202 00:12:11,280 --> 00:12:13,959 Speaker 1: I would say that in UM some of our kind 203 00:12:13,960 --> 00:12:18,199 Speaker 1: of more lax cities were masked mandates to come down 204 00:12:18,360 --> 00:12:21,120 Speaker 1: or much more relaxed. I would say those cities have 205 00:12:21,559 --> 00:12:26,120 Speaker 1: um actually seen a very accelerated momentum when it comes 206 00:12:26,160 --> 00:12:29,680 Speaker 1: to retail easting, and retailers are moving into those markets 207 00:12:29,679 --> 00:12:33,480 Speaker 1: i e. North, the North or sorry southeast, UM in 208 00:12:33,559 --> 00:12:36,320 Speaker 1: central region, UH, in areas where it's a little bit 209 00:12:36,360 --> 00:12:40,240 Speaker 1: more you know, mass mandated, we definitely are seeing a 210 00:12:40,360 --> 00:12:43,800 Speaker 1: very slow reaction come back in those cities. All Right, 211 00:12:43,840 --> 00:12:45,800 Speaker 1: we gotta run, Andie, thank you so much to Angie 212 00:12:45,800 --> 00:12:48,160 Speaker 1: Solanki over Collier is joining us on the phone.