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As the retail landscape continues to evolve, experts argue that the term “shopping centers” doesn’t completely describe what modern stores offer.

Retail properties have expanded to become storage centers, ghost kitchens, offices, distribution points, and medical centers. According to Forbes, the smaller cap rate will lead to higher prices that bring valuation multiples for retail spaces in line with those for industrial or multifamily properties. Four trends impact this expectation.

Adaptive Reuse

A combination of e-commerce growth and changes in consumer behavior over the past year has created more vacant retail space. This leaves the door open for property owners to reconfigure the space for tenants who can pay higher rents. In turn, retail spaces have been transformed to accommodate other purposes.

For example, ghost kitchens, or restaurants that only offer delivery through third party apps, have popped up around Lansing and boosted income for restaurants while ensuring that commercial kitchen space is still occupied. Earlier this year, it was revealed that celebrity chef Guy Fieri opened four ghost kitchens called Guy Fieri’s Flavortown Kitchen in Lansing and Metro Detroit. Ghost kitchens and other new uses have contributed to the shift from traditional shopping centers to spaces that meet present-day needs.

Omnichannel Distribution

Businesses with a large digital presence such as Amazon are driving brick-and-mortar retailers to develop their digital shopping experience for customers. These retailers have also made their sales floor smaller to increase the amount of stock space they have for online orders. This type of space blends retail and industrial, demonstrating another way that shopping centers go beyond traditional ways.

Experiential Retail

Retail businesses that cannot be grown digitally, including quick-service restaurants, boutique fitness centers, and grocery stores, continue to redefine what shopping centers look like. These in-person businesses can be effective with personalization and sensory experiences as provided in another article from Forbes.

Last Mile Distribution

Retail spaces are ideal distribution channel in the form of local delivery or in-store pickup for customers due to location. Amazon and Whole Foods have demonstrated this approach. These spaces solves the “last mile” issue regarding factors that can complicate the delivery of products to the consumer during the last mile of the process. In this case, the retail space serves as a warehouse/distribution center.

Modern retail spaces may be home to retail businesses, but the direction that this sector of the industry is heading in means that several stores will will have other purposes from ghost kitchens to storage centers and more.

To read our sources, click HERE:

Stop Calling Them Shopping Centers: Four Commercial Retail Asset Trends

Can virtual ‘ghost’ kitchens trend help struggling restaurants in Greater Lansing?

Guy Fieri’s Flavortown Kitchens popping up in Michigan: Here’s where

Is Experiential Retail Still Relevant In 2021?