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12 Colliers International

GRAND RAPIDS                                                     The past year was predicated on some
                                                                 fundamental shifts in the way retailers do
RETAIL MARKET                                                    business. In 2018, the landscape will
                                                                 continue to evolve, with retailers continuing to
                                                                 find ways to make physical stores relevant in
                                                                 an increasingly digital era.

Over the past year, the West Michigan retail market has          to a shifting consumer paradigm are feeling pressure;
undergone some significant changes. We saw local retail           however, the demise of physical retail has been largely
notables such as MC Sports, Family Christian Bookstores,         over-dramatized. In 2018, we expect to see further shifts
and Sears all close locations. However, with change comes        in the retail landscape, yet according to the International
new opportunity. How bricks-and-mortar stores are utilized       Council of Shopping Centers (ICSC), there are projected
has begun to change, and that shift will be a driving force      to be more retail establishments opened in the United
in the 2018 real estate market. Many retailers are focusing      States in 2018 than closed. A stark contrast to what is
on omni-channeling, which refers to increasing brand             generally reported. Additionally, according to the U.S.
accessibility and awareness by attracting customers, using       Census Bureau, e-commerce only accounts for about 8.5
multiple distribution avenues, including both online and         percent of total retail and food service sales, and about
physical stores. This is a trend we saw take form in 2017        11 percent if you include cars and auto parts; showing
and one we see continuing into 2018.                             that while online sales continue to grow, they still only
                                                                 represent a fraction of all retail purchases.
Part of this shift has seen large big-box stores shrink
their footprint or close all together. The approximately         It is no secret that Grand Rapids has put itself on the map in
313,000-square-foot Sears anchor store at Woodland               recent years, with a hot housing market, low cost of living,
Mall is now being turned into a new mall wing comprised          and record low unemployment and vacancy rates across
of multiple smaller-footprint retailers. Part of this is due to  the board. As we expect to see many of these trends
over-building in the past. In fact, the United States averages   continue in 2018, we also anticipate the retail real estate
24.5 square feet of retail space per capita, compared to         market to continue to thrive as well. At the beginning of
just 4.5 square feet per capita in Europe.                       2017, we had “cautious optimism” for the year ahead.
                                                                 In 2018, we have “optimism”.
The successful de-malling of Centerpointe Mall in Grand
Rapids and Westshore Mall in Holland has proven that             Location has always been a driving force in the retail
accessibility and convenience is as valued as ever, and a        world. Many retailers are willing to pay a premium for
trend to be continued. Retailers who are not ready to adapt      premier location. However, this usually manifests itself
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