Pierson Commercial Real Estate
It has been said that resilience increases when one recognizes the magnitude of what has already been accomplished. Such is the case for neighborhood and community shopping centers during this pandemic economic recovery.
In a sector where foot traffic is king, these shopping concepts (neighborhood, community and/or convenience centers for the purposes of this discussion) were uniquely challenged by the sudden shutdown of early 2020. Although they were tested similar to their regional-mall counterparts on some levels – supply-chain issues, stay-at-home orders and evolving shopping behaviors – a significant majority of community shopping center tenants (primarily the local mom-and-pops and regional chain-store operators) lacked an omni-channel presence or capability to handle buy or order online, pick-up in store or at the curbside.
Town Center Positioning Fulfills Day-to-Day Needs
Despite these hiccups and countless others, neighborhood and community shopping centers adapted and leveraged their “town center” identity for day-to-day needs. Often anchored by a grocery store or big-box retailer like Burlington, the tenant profile for these centers includes banks/ATMs, convenience stores, take-out and quick-casual dining/restaurants, personal health, service and lifestyle providers. By amending their customer service strategies and effectively communicating their commitment to safety measures, they kept their doors open. In turn, they emerged as the admirable adapters of commercial real estate.
Two years after the onset of COVID-19, recovery on the neighborhood and community shopping center front continues to be robust, solid and resilient. This is evident in Pierson Commercial Real Estate’s retail leasing activity in Q1 2022, during which the firm finalized a substantial number of long-term lease agreements throughout New Jersey.
Specific highlights include the 203,912-SF Hazlet Town Center in the all-important Central New Jersey Metro, where the firm finalized lease agreements totaling 44,805 SF in recent weeks at the newly repositioned regional shopping center. Pierson also orchestrated a wave of lease agreements at The Shops at Pier Village in Long Branch with Starbucks, the acclaimed national Japanese steakhouse Koto Asian Bistro and aXd by Alba in addition to several other tenants.
From Mercer County and the Jersey Shore Region to New Brunswick and the City of Newark where the firm counts the 100,000 SF retail portion of Junction at the Gateway Center among its exclusive leasing agent assignments, Pierson is on the frontlines representing some the state’s leading developers, owners and tenants with a local, regional and national presence.
At the Junction at Gateway Center itself, Pierson’s most recent lease signings include eight grab-and-go and full-service restaurants in addition to Mokbar, a Korean food concept founded by renowned chef Esther Choi; One Step Ahead Learning & Performing Arts Center; and Serafina, the well-known hotspot out of Manhattan. The firm also has substantially expanded its submarket expertise within Hudson County, with a focus on securing assignments in Jersey City and Hoboken.
While there is no doubt the pandemic has transformed consumer businesses and brick-and-mortar stores of the past, the days of seismic shifts have given way to gradual pivoting when it comes to strategy and philosophy of local, regional and national operators. It is the former – when retailers had to rapidly adjust their sails at a time there was so much unknown about the virus and its lasting impact – that has established the groundwork for current practices and future trends.
Here-and-Now & Future Concepts include Brick-and-Mortars
Larger retailers are now eyeing shopping centers to deliver smaller-format concepts to their customers; buy-online, pick-up in store or at the curbside has settled into a regular practice particularly among supermarket anchors and food service providers; and a desire among consumers exists for an omnichannel experience – the ability to meet and transact across multiple channels and platforms, including within a brick-and-mortar store. Regardless of size or goods/services being delivered, retailers recognize and acknowledge the power of local, immediate-area connectivity and how it fosters customer loyalty.
Validating these behaviors is data that supports the enduring importance of brick and mortars. According to a survey conducted by the National Retail Federation (2021), 61% of consumers continue to rely on physical stores for their everyday shopping purchases. Another poll, conducted by the University of Arizona, indicated respondents feel traditional retailers are part of the social fabric of their community. Future projections also add to this optimism: 72% of U.S. retail sales will still occur in brick-and-mortar stores in 2024 (Forrester, 2022).
In short, consumers retain the desire to engage in a store-based shopping experience and the act of making purchases – both of which bode well for experiential regional shopping centers as well. Here, the key to distinguishing themselves from online retailers is to provide unique on-site experiences in or near one’s home and workplace. For this reason, brick-and-mortar stores continue to provide value to retailers because they strengthen a customer’s relationship to the brand.
In closing, while commercial real estate’s retail sector continues to enjoy its robust recovery, retailers of all shapes and sizes will remain persistent in redefining their concepts and what they offer consumers. Shopping is no longer an action. Rather, it is a multi-tiered experience. From online to offline, today’s hybrid retail journey ultimately leads to the store down the road or the one that is just steps from places of work. It is the one that is most convenient and is sure to remain the most preferred shopping destination for the foreseeable future.