An article released by The Long Beach Business Journal discusses the strength in the current retail space market, despite closures from big-box retailers in the community. The article also features an interview with INCO Commercial’s own principal and board member, Douglas Shea.
Closures from retail giants Sports Authority and Sports Chalet have left some uncertain about the market for retail space. However, Shea reassures that the current low interest rates have been driving an upward momentum in commercial real estate that will likely continue throughout the year. The demand for ‘shop spaces’ typically ranging from 1,500-3,000 SF are doing especially well, as new entrepreneurs are taking advantage of those low interest rates.
Retail spaces larger than 10,000 SF are the ones facing more difficulty in filling vacancies. Brian Russell, Vice President of Coldwell Banker Commercial BLAIR WESTMAC predicts that with the closures of Sports Authority and Sports Chalet, other sports retailers will benefit and strengthen their footing in the market. Shea even suggests those retailers may expand to those vacant stores, noting that the demand for brick-and-mortar sports retail stores is still significant. For the time being, Russell proposes a furniture store would do well in the larger vacant retail spaces in Long Beach.
Both Shea and Russell agree if the low interest rates and current climate continues, the positive trends and momentum will prevail. Yet, the proposed 1% Long Beach sales tax increase on the June ballot may threaten the upward trends, as well as continued rental rate increases on retailers and restaurateurs.
Still, new developments and major retail projects provide encouragement as they get underway throughout Long Beach. Most notable is the planned 250,000 SF of retail space on the currently vacant lot next to Long Beach Airport slated for ‘airport-themed’ development. Burnham USA Equities, Inc., which purchased the land, is expecting to break ground next year. Additionally, a new 241-room hotel is also planned for the site by Nexus Development, with construction beginning as early as July of this year.
Overall, the Long Beach area promises a strong outlook for retail shops and commercial real estate investors, who can capitalize on the low interest rates and local market conditions.
Read the full-length article by clicking on the link below.