Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. So we
Speaker 1: did get that read on retail sales rising the most
Speaker 1: in ten months, broad based rebound. You really have to
Speaker 1: dig that into the details to understand because otto was
Speaker 1: a big part and furniture among the biggest gains. Let's
Speaker 1: talk about let's talk a little bit about US retail
Speaker 1: from a real estate perspective. Joining us now is Angie
Speaker 1: salon Ki, National director of US Retail at call Yers,
Speaker 1: the commercial real estate brokerage services firm. How are you on.
Speaker 1: Good to have you on the show. Thank you so much.
Speaker 1: It's great to be on the show with you. So
Speaker 1: just give us an update right now on how things
Speaker 1: are going around the country. We like to check in
Speaker 1: with call Yer's pretty much once a quarter to get
Speaker 1: the temperature of what's going on when it comes to
Speaker 1: commercial real estate and and and where things are. How
Speaker 1: would you characterize foot traffic and and and the temperature
Speaker 1: compared with pre pandemic. Yeah, that's a great question. Intense
Speaker 1: though the retail sector definitely has seen a nice kickoff
Speaker 1: ino and nevertheless we're still spending mostly due to the
Speaker 1: transfer of spend from services to products. Entertainment and leisure
Speaker 1: are still not back to normal. Fully, the great news
Speaker 1: that we're seeing when it comes to retail is really
Speaker 1: around the absorption. So roughly seventy six point finally in
Speaker 1: square feet of space has been absorbed since the end
Speaker 1: of one, which is the highest figure recorded since twenty
Speaker 1: What does that mean? So basically what we're seeing is
Speaker 1: UH store openings are actually outpacing store closures and it's
Speaker 1: great to see that because it's become quite dynamic. Retail
Speaker 1: has definitely morphed into traditional retail to non traditional retailers expanding,
Speaker 1: so a lot of wellness, healthcare medtail retail that we
Speaker 1: call it UM expanding into a lot of their retail developments.
Speaker 1: So you're starting to see this integration which has been fantastic. Also,
Speaker 1: is it sticky? Is it? Says? Yeah? Yeah, yeah, most definitely. Um. Look,
Speaker 1: we have all looked at, you know, convenience as being
Speaker 1: a primary factor right especially right now where we have
Speaker 1: been working remotely, working from home, trying to kind of
Speaker 1: um you know, work from home, but also you know
Speaker 1: have family and UH and and kids still sometimes work,
Speaker 1: staying at home, and going back to school. So this
Speaker 1: convergence is really starting to create a pure factor of convenience.
Speaker 1: If I can go to a shopping center and take
Speaker 1: my pet and have my pet, you know, go to
Speaker 1: the veterin area, the new modern that's uh concepts we're seeing,
Speaker 1: or going to a a medical um, you know, clinic
Speaker 1: at a shopping center and then go grocery shopping right after. Hey,
Speaker 1: it's all about convenience and about time, all right, So
Speaker 1: where's the dead space? Where's the space that's not coming back?
Speaker 1: So a lot of the space. So one thing that
Speaker 1: was really fascinating we were looking at some of the
Speaker 1: stats with I C, S C, and you know, overall
Speaker 1: occupancy is hovered around n UM. So the dead space
Speaker 1: that we're starting to see is going to be in
Speaker 1: maybe some of those markets where you had product that
Speaker 1: was already you know uh C and d B minus
Speaker 1: retail that really never came back regardless of the pandemic.
Speaker 1: Those are the spaces that are are still lingering out there.
Speaker 1: But we're also seeing new concepts taking some of those spaces,
Speaker 1: i e. As warehouse space, UM because there's uh, you know,
Speaker 1: there's a need in demand still for that last mile.
Speaker 1: And Jeff heard you talk a lot about health care services, biotech,
Speaker 1: uh and the idea of offering services that you know
Speaker 1: can't really be replicated online at this point. How much
Speaker 1: of an area of growth is that for for retail
Speaker 1: space right now? Oh gosh. In terms of numbers, this
Speaker 1: is just a pure estimate, we haven't really callied it,
Speaker 1: but I would say that when you look at an
Speaker 1: average shopping center that's roughly let's say, you know, two
Speaker 1: hundred thousand to three d thousand square feet, we're looking
Speaker 1: at you know, um medtail retail and medical retail coming
Speaker 1: in and probably taking you know, five of that space.
Speaker 1: So it's a pretty significant amount. Um So, the larger
Speaker 1: the square footage of the shopping center, the higher that
Speaker 1: number maybe, but that's you know, we're looking at you know,
Speaker 1: uh wellness, healthcare, um uh mental wellness. There's a lot
Speaker 1: of different concepts that are coming out. Yea, hey, listen
Speaker 1: on State, sit tire for a second. We've got to
Speaker 1: do a little bit of news, but we'll come back.
Speaker 1: Get back to Angie solon Ki's national director of us
Speaker 1: RETA Colliers. They're publicly held real estate services and investment
Speaker 1: management firm. They've got about fifty one billion in assets
Speaker 1: under management global, so they see real estate all the
Speaker 1: different verticals, and of course we're talking retail here, and
Speaker 1: that's really what I want to hit on when we
Speaker 1: come back, you know, talk a little bit about the
Speaker 1: differences between the U S and other parts of the
Speaker 1: world as we see the pandemic ceasing in some areas.
Speaker 1: Good point a siding, Maybe I should say, yeah, well,
Speaker 1: right now, right fingers crossed, I want to get back
Speaker 1: to our guest on g. Salon Ki. She's National director
Speaker 1: of US Retail at Colliers Uh you know them, well,
Speaker 1: publicly held real estate services and investment management firm, and
Speaker 1: she's still with us on the phone in San Francisco,
Speaker 1: and I wanted to I know you that you oversee
Speaker 1: national you're the national director for US Retail, but I
Speaker 1: want to call yours is a global operations So I
Speaker 1: want to get an understanding of what's happening around the
Speaker 1: world right now. How would you characterize the different pace
Speaker 1: that other parts of the world are leaving this pandemic hopefully,
Speaker 1: I mean, what is the data telling you? Yeah, what's
Speaker 1: really interesting is if we stop and look at the
Speaker 1: different countries in terms of omni channel, And so when
Speaker 1: we looked at the omni channel percentage change year over year,
Speaker 1: you're looking at anywhere from three to five percent increase
Speaker 1: in terms of UM countries adopting the omni channel, which
Speaker 1: in effect really is helping the overall UM consumer economy
Speaker 1: the revenues for retailers, etcetera. And what I mean by
Speaker 1: that is UM. For example, we're seeing fast food chains
Speaker 1: who are reporting revenue growth from digital orders, making up
Speaker 1: one third of some of the company's global sales. But
Speaker 1: is that so is that pandemic or you think that
Speaker 1: stuff that sticks? I think that's going to stick, because
Speaker 1: again it goes back to conveniences. So whether you're going
Speaker 1: back into the office and you're accustomed to ordering online
Speaker 1: for certain certain feed goods or fast food lunches, et cetera. UM,
Speaker 1: I think that's going to continue. So one thing I
Speaker 1: want to ask you, Tim and I. If we walk
Speaker 1: out the door of Bloomberg headquarters, there is available space.
Speaker 1: I think at least two spots across the way on
Speaker 1: the corner there used to be the container store. There
Speaker 1: was a Starbucks in our building at a Starbucks they're
Speaker 1: both gone, and the container store had a pretty big space.
Speaker 1: I mean, there's a lot of open spots as you
Speaker 1: walk around, and that's just our block. So help me
Speaker 1: out regionally, you know, Tim was just asking you a
Speaker 1: global perspective question, but I do wonder it does feel
Speaker 1: like there's some really rough spots when it comes to
Speaker 1: retail and real estate. And then of course there's the
Speaker 1: American Mall across the way that continues to kind of
Speaker 1: figure out its way. I mean, that's kind of a
Speaker 1: special case, but it's been a special case with a
Speaker 1: lot of you know, years of tough times. Sure, sure, no,
Speaker 1: I would definitely agree that in certain markets where we
Speaker 1: have uh, you know, dense urban um you know areas,
Speaker 1: those areas definitely are we're going to see a slower
Speaker 1: growth back to you know, higher occupancies, et cetera. But
Speaker 1: the positive news on that is that although we are
Speaker 1: seeing these vacancies in various sizes, we're starting to see
Speaker 1: the retailers coming back to tour these markets. So what
Speaker 1: we're seeing is that they're coming in, they're touring the
Speaker 1: markets because they're ready to start staging and identifying space
Speaker 1: to reopen um. It may most likely be a different concept.
Speaker 1: It might be a larger or smaller concept. It might
Speaker 1: be you know, that container storm might convert into multiple stores.
Speaker 1: But we are seeing tour activity from retailers start to
Speaker 1: peak up again, and this is from global brain. So
Speaker 1: I'm wondering about the permanent shift that we see on
Speaker 1: the other side of this pandemic. What fundamentally changes when
Speaker 1: it comes to commercial real estate, when it comes to occupancy,
Speaker 1: when it comes to who and what is occupying these spaces.
Speaker 1: So I would say from a forecast perspective, there are
Speaker 1: still those outside influences, right, and that means, you know,
Speaker 1: when we start to see you know, the inflation UM
Speaker 1: margins for retailers UM starting to creep back up if
Speaker 1: they're not normalizing hopefully by by um, you know, the
Speaker 1: summer of this year. But we're also starting to see UM,
Speaker 1: you know, retailers take some of the capital that they've
Speaker 1: harvested UM and as you probably have seen some of
Speaker 1: the you know call it top um, you know, piered
Speaker 1: retailers are definitely starting to take their capital that they've
Speaker 1: harvested and put it back into either remodeling stores, making
Speaker 1: stores more efficient operationally, where they're you know, looking at
Speaker 1: the point of sale where it's directly done by the
Speaker 1: consumer themselves. Uh So there's new technolog AG NEWS systems
Speaker 1: that are starting to come back in and be deployed,
Speaker 1: and through that effort, we will start to see the
Speaker 1: opportunity for retailers to basically take on more retail but
Speaker 1: maybe at a smaller footprint, or they're going to be
Speaker 1: more operationally more optimized, so they're letting they're able to
Speaker 1: start reinvesting capital in more that omni channel approve. So, Angie,
Speaker 1: I'm just thinking about our audience UM in terms of
Speaker 1: investors thinking about the real estate real estate space, I
Speaker 1: do think, you know, we've all expected some real fallout,
Speaker 1: significant fallout because of the pandemic, but it does seem
Speaker 1: like there's been a reallocation and somehow for the most
Speaker 1: part getting through. What do you think our investment audience
Speaker 1: needs to understand about what you are seeing when it
Speaker 1: comes to US retail space in particular. Yeah, I would
Speaker 1: say that from a capital market's outlook, from an investors
Speaker 1: investors are actually coming back into the retail space UM,
Speaker 1: and we're actually seeing that, you know, in UM based
Speaker 1: on fourth quarter sales and this is actual sales of
Speaker 1: shopping center that the fourth quarter actually accounted for a
Speaker 1: roughlyent of total sales for the year, and that for
Speaker 1: the year's sales total about was eighty four billion dollars.
Speaker 1: So we're actually forecasting pretty strong and ay growth in
Speaker 1: the next five years from a retail pricing perspective, UM
Speaker 1: reaching somewhere in the range of five in two. It's
Speaker 1: possibly going to be the largest increase in value since UM.
Speaker 1: Of course that's oriented in around grocery anchored shopping centers.
Speaker 1: But we're going to continue to see that optimism come
Speaker 1: back and that starts that will start to come back
Speaker 1: in terms of the urban core retail market. In addition
Speaker 1: to that, we're also seeing a lift in loosing activity
Speaker 1: in retail overall. Andy, what are the shifts that you're
Speaker 1: seeing when it comes to where people are working. You're
Speaker 1: just talking during the break about Eric Adams, the mayor
Speaker 1: of New York, telling people that it's time to come
Speaker 1: back to work. UM in thirty seconds, are what are
Speaker 1: the patterns that you're seeing in the US in different cities.
Speaker 1: I would say that in UM some of our kind
Speaker 1: of more lax cities were masked mandates to come down
Speaker 1: or much more relaxed. I would say those cities have
Speaker 1: um actually seen a very accelerated momentum when it comes
Speaker 1: to retail easting, and retailers are moving into those markets
Speaker 1: i e. North, the North or sorry southeast, UM in
Speaker 1: central region, UH, in areas where it's a little bit
Speaker 1: more you know, mass mandated, we definitely are seeing a
Speaker 1: very slow reaction come back in those cities. All Right,
Speaker 1: we gotta run, Andie, thank you so much to Angie
Speaker 1: Solanki over Collier is joining us on the phone.