Why predictions of a ‘retail apocalypse’ are overblown
May 19, 2017 | by Robert K. Futterman | CNBC
The prevailing viewpoint today is that a retail apocalypse is upon the American market, that it will bring the death of shopping malls, and that e-commerce is largely to blame. A series of big-name store closings have prompted dire proclamations and forecasts of further doom. But the headlines and store closings do not show the full picture of the health of the U.S. retail sector. In fact, nineteen brands have announced the opening of a total of 2,861 stores in the first half of 2017.
When taking a look at Manhattan as an example, one of the hottest real estate markets in the country showed that average asking rents declined in 11 of the 17 retail corridors according to the most recent (fall 2016) published Real Estate Board of New York’s (REBNY) Manhattan Retail Report.
When looking closely at the data, one can quickly see that the numbers don’t tell the full story of the evolving market and it’s something that we have felt for a long time. According to REBNY’s analysis, the asking rent adjustments are indicative of a natural correction in a market that had been soaring ever since the 2008 financial crisis.
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