8A — April 2025 — Spring Preview — M id A tlantic Real Estate Journal
www.marej.com
S pring P review By Joe Betesh, Premier Centers The Great Retail Reset: Experience & value will define winners
T
he future of retail real estate isn’t just chang - ing. It’s dividing.
The winners in this new landscape understand a fundamental truth: Con - sumers want either excep- tional VALUE or exceptional EXPERIENCE. Nothing in between survives. This bifurcation is reshap - ing retail real estate as we know it. The value players (Costco, TJ Maxx, Dollar General) continue expanding their physical footprints. Why? Because discount shopping remains a treasure hunt – an experience that doesn’t translate digitally.
Finding that bargain cre - ates dopamine. It’s biology, not retail strategy. At the other end, premium experience-driven retailers are thriving. Apple Stores generate more revenue per square foot than any other retailer because they’re not stores – they’re temples of innovation where consum - ers worship at the altar of aspiration. Lululemon doesn’t just sell overpriced yoga pants; they sell community and identity. The store is merely the physical manifestation
of that promise. The implications for retail real estate are profound: Location premium is invert - ing. Suburban and exurban locations with strong demo- graphics are outperforming traditional urban centers. Re - mote work has redistributed spending power away from central business districts. Size flexibility matters. The most innovative retailers are experimenting with format. From micro-stores to flag- ships, the rigid box mentality is dead. Retail spaces must adapt to community needs.
Tech integration is non-ne - gotiable. Smart retail spaces blend digital and physical seamlessly. The store of the future knows who you are when you walk in and what you want before you do. Mixed-use will dominate. The most valuable retail real estate will be embedded in ecosystems where people live, work, and play. Stand - alone big boxes? Dinosaurs awaiting extinction. The mall as we knew it is over. But community gathering spaces are eternal. What does this mean for investors, developers, and retailers? First, bet on extremes. Ei - ther pristine locations that command premium rents from experience-driven retailers or value-centered locations with strong traffic patterns. Second, flexibility is curren - cy. Lease structures, space configurations, and tenant mixes must evolve more rap- idly than ever before. Third, community integra - tion is essential. Retail spaces must serve genuine commu - nity needs beyond commerce. The retailers who will flourish understand their role isn’t selling products – it’s delivering solutions to human problems. The real estate that hosts them must facilitate this mission. Success in retail real es - tate now requires asking different questions: Not “How many square feet do you need?” but “What experience are you creating?” Not “What’s your mer - chandise mix?” but “How does your physical space complement your digi- tal presence?” Not “What’s the foot traf - fic?” but “What’s the community engagement?” The future belongs to those who recognize that retail real estate isn’t about buildings. It’s about build - ing relationships between brands and humans. The middle is evaporat - ing, but the extremes are expanding. Your strategy must pick a lane. Value or experience. Choose wisely. Joe Betesh is princi- pal of Premier Centers. MAREJ
Let’s be clear: physi- cal retail isn’t dead – medio- cre retail is. The pan - demic didn’t create new consumer behaviors;
Joe Betesh
it accelerated existing ones. What would have taken a decade happened in months. The weak were exposed, the strong strengthened.
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