Mark Reeder
EVP & Market Leader
Dallas/Ft. Worth
We recently sat down with Mark Reeder, EVP and market leader for the SRS Dallas/Ft. Worth office, to ask him about his predictions for the disposition industry as we settle in to 2013. Here are some of his insights.
Q: Surveys are reporting many retailers have plans to open stores over the next 24 months. Nationally, 81,990 stores are planned to be open by 2015. What impact does that have on the disposition side of the business for the coming year?
Reeder: A lot of those are going to be smaller shop space going into retail strips. When I think of disposition I think of certain categories, from a 5,000-square-foot restaurant to a 30,000-square-foot junior box, even a 10,000-square-foot drug store or 100,000-square-foot big box. If there are 82,000 stores opening in 2013, and most of them are smaller, those are going into small shop service space, and mostly impact the landlord side of the business. I do still think that a few significant retail names could change their plan or reduce store count significantly. Those disposition opportunities will still come throughout this year.
Q: Some retailers are changing their e-commerce strategy. Target has implemented six online only brands to try and capture sales in every avenue where their customer shops. Do you think other retailers will follow suit, and if they do, does that mean that many other retailers could be looking for smaller stores in the near future?
Reeder: I think that every viable retailer will be looking for omni-marketing opportunities from Target to Toys"R"Us. Every retailer is going to see sales growth through channels in addition to brick and mortar. It’s a case by case basis if they will reduce their footprints. Some will right-size, others may investigate and see how omni-marketing and web based sales are impacting them. I don’t think it will always be a reduction, but in some cases it will.
Q: Any other predictions for the disposition industry for 2013 you would like to share?
Reeder: It appears the occupancy levels of anchor sized stores has increased as the inventory has decreased because of the lack of new development. Some opportunistic retailers have expanded into vacant boxes. So, any new disposition opportunity might be backfilled more quickly because of lack of options. Also, disposition is not just existing buildings, it is also underutilized land sites adjacent to existing stores. Excess land sales are still happening and many large retailers are already doing this. Mark works with many disposition clients for SRS Real Estate Partners. We look forward to his work in 2013.