As many workers continue to make their way into the office just a few days a week, retail spending is being redirected to retail districts closer to where they live, concludes a new snapshot report from real estate firm CBRE titled “Suburban shopping is hip again.” That, in turn, has resulted in more available retail space in Central Business Districts (CBDs), where vacancy rates now exceed the those of suburban spaces for the first time since 2006, GlobeSt.com reports on its findings from the snapshot.
Suburban availability has fallen, according to the report, upending a longtime, pre-pandemic trend whereby urban and suburban fundamentals were closely correlated, the report said.
Matt Hammond, Partner/SVP Brokerage with the Coreland Cos., told GlobeSt.com that downtown environments have faced a variety of post-pandemic challenges significantly affecting shopping patterns there.
“Retailers and restaurants need daytime and nighttime traffic,” Hammond said. “They depend on employees going out to lunch, as well as professionals living in the area to enjoy evening dining, events, and shopping.
“This flight from CBDs, as well as ongoing security concerns in prominent areas, has deterred retailers and restaurants from expanding. There was a time when downtown had the best new restaurants and most unique environments, but this is no longer the case.”
For the past decade, opportunistic owners of suburban centers have invested in experiences and creating destinations, he said.
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Such complexes have “elevated design with a larger focus on outdoor dining areas, community art and gathering spaces,” Hammond explains. “Recognizing that restaurants can be a significant draw, they often have a distinctive design and are often centrally positioned or clustered to create synergy.”
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