The Changing Face of Retail

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A retail fulfillment center

Despite demand for new office space, rising construction costs and a shortage of labor are delaying progress in the development of new commercial real estate. Because development and construction costs are so high, the rents required to support new developments are also high; this means one things – the projects that will be developed in the coming years will have to substantiate those rent increases. Those familiar with the retail industry say that there are only two types of new development that meet that criteria: e-commerce distribution centers and diverse mixed-use retail projects.

An industry expert was quoted as saying “The future of retail is industrial,” meaning that a lot of retail stores have been closed in favor of opening large fulfillment and distribution centers. Most speculate that more and more retailers will focus their commercial real estate efforts into these large, all-encompassing facilities rather than small, individual stores that require respectively more capital to maintain.

Two mixed-used, retail-focused developments have been given the go ahead by their respective cities to break ground. The first is Avalon in Alpharetta, which we’ve written several articles about in recent weeks. The second is Buckhead Atlanta, future home to the new Spanx HQ and flagship retail store. Both of these developments incorporate a blend of retail and office elements to provide those that work and live in the community a more diverse range of work and shopping options.

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