Big-Box Retail Demand

Demand has dropped for big-box warehouses and retail locations — but owners and developers shouldn’t fret: The decline is merely to levels of demand experienced before the pandemic. That’s according to a new report. Also for today, Commercial Observer was on the ground this week in Los Angeles for the Urban Land Institute’s fall meeting; and we came back with an expert take on how tough it might be to repurpose struggling office buildings.

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— Tom Acitelli, Deputy Editor

Demand For Big-Box Warehouse Space Returning to Pre-Pandemic Levels: Report

Demand for big-box warehouse space is returning to pre-pandemic volumes after reaching “unprecedented” levels in 2021 and 2022, according to a new market report from Colliers that analyzes the interplay between industrial and retail properties. Vacancy rates for big-box warehouse spaces are climbing throughout the country, per Colliers. This is mostly due to record new supply, which caused a 29 percent drop-off in demand for big-box industrial sites in the first half of this year. That fact would normally be cause for industry concern, the Colliers report notes, but it could also help return big-box vacancy to healthier levels. The construction pipeline for such properties will also dip dramatically heading into the new year, further balancing supply and demand.

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ULI Panel: Adaptive Reuse and Density Reform Is Key — But Difficult

A good chunk of urban office stock is obsolete. But can adaptive reuse really be the silver bullet many hope it will be? That was one big question at the Urban Land Institute 's (ULI) fall meeting at the Los Angeles Convention Center in Downtown L.A. on Wednesday at a general session discussion called “State of Urban Centers: Pandemic, Economy, Opportunity.” “It’s no secret cities are going through a challenge,” said Laura Hines-Pierce of Hines. “But we were oversupplied before the pandemic. The shock of the pandemic and the rise of interest rates made it so that oversupply was not allowed to correct naturally. But 10 to 30 percent of the office market is facing true obsolescence.”

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