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Retail Trends

Understanding Market Trends Presented to: AI Connect Hilton Austin, Austin, Texas Presented by: Del H. Kendall, MAI, CRE, FRICS RERC Managing Director. Retail Trends. E-Commerce Strong Growth Store Formats Survival of the Fittest Coping with E-Commerce Changing Consumers

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Retail Trends

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  1. Understanding Market TrendsPresented to:AI ConnectHilton Austin, Austin, TexasPresented by:Del H. Kendall, MAI,CRE, FRICSRERC Managing Director

  2. Retail Trends • E-Commerce • Strong Growth • Store Formats • Survival of the Fittest • Coping with E-Commerce • Changing Consumers • Millennial’s Driving Change • Ethnic Diversity

  3. E-Commerce • Total retail sales increase 2.6% from Jan. 2013 to Jan. 2014-Total Volume $427.8 Billion • Biggest growth rate of 6.5% for non-store retailers, includes e-commerce. • Only 1% of over 1,000 surveyed never had shopped online; 72% at least once per month.

  4. E-Commerce Growth Source : U.S. Census Bureau

  5. Retail TrendsE-Commerce Vs. Brick & Mortar

  6. E-Commerce Trends Source: U.S. Census Bureau

  7. Changing Store Landscape • Collateral Damage of E-Commerce • Circuit City, Linens and Things failed, Radio Shack closing stores and restructuring • Expansion of Winners and New Entries • Decline of the Mall, Rise of the Lifestyle Center

  8. Retail-The Growth Story

  9. Evolution of Retail Concepts

  10. Millennials Influence on Buying • Omni-Channel Integration • 55% of consumers search brands on Facebook • Rent v. Buying • Doubling in 2014 of Luxury & Sporting Goods, Tools • 70% would try clothing made from a 3D Printer • Cashless Society • 62% of consumers had less than $20 on hand

  11. INDUSTRIAL DEMAND

  12. Industrial Trends • Warehouses Moving Closer to Consumer • Same/next day shipping • Amazon • agreed to collect sales tax • Building 50 warehouses of one million square feet each • Amazon: Seattle, New York and the UK have automated lockers in drug stores and convenience stores to place deliveries

  13. Changing Rental Patterns • Millennials • Marrying later and less often (median age of marriage has gone from 24.7 to 29 and 22 to 26.6 for men and women respectively over since 1980) • High amounts of debt and poor job prospects out of college (Secured debt of people under 35 has gone from $59,019 to $76,500 from 2000 to 2011) • Prefer downtown urban environment closer to work • Technology, apartments have latest technology installed • Living at home (age 25 to 34 living at home-10.2% in 2003 to 13.92% in 2013)

  14. Single Vs. Married Homeowners

  15. Homeownership Declining

  16. Demographic Trends • More ethnically diverse • Lower incomes support higher renter population • Many immigrant families are larger, demanding larger units • Less mobile residents • Number of movers 17.3% in 1991 to 11.7% in 2012 • Smaller household sizes • persons per household at 2.54 people per household

  17. Development Trends • Apartment Rents/sf exceeding Office Rents (especially in urban downtowns) • Adaptive Re-use to Apartments • Office vacancies high, leaving hundreds of millions of square feet vacant • Places like NYC, Cincinnati, Baltimore, Richmond, all have record number of conversions under way • Both Buffalo, NY, and Providence, RI are discussing turning their tallest building in town into apartments

  18. AI ConnectUnderstanding Market TrendsPresented by:Del H. Kendall, MAI, CRE, FRICSRERC Managing Director

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