Where Retail Recovers First / Part II: Where Expansion-Minded Retailers Will Be Gravitating in the Months Ahead, and What It All Means for Municipalities
We are still paralyzed. And understandably so: there is uncertainty everywhere. In the best-case scenario, retail development and leasing will be sluggish for the next six to twelve months. A number of tenants will be reducing their physical footprints, some disappearing entirely. Many of those that survive will be focused primarily on restoring their balance sheets. That said, normal life will return, likely before new projects that are started today would even be ready for occupancy, and as I discussed in Part I, there will be a subset of expansion-minded tenants ready to be greedy while others are fearful.
What does all of this mean for the shopping centers and business districts that generate the tax revenue municipalities need to fund schools, pay police and provide services? What sorts of new projects (if any) will be able to move forward? Which existing ones will be left with empty anchor spaces, and which of those will be able to back-fill such vacancies? Finally, what role can and should local governments play in this process of retail recovery?