Long before self-isolation and social distancing ruled daily human behavior, droves of hustling professionals loyally stepped into their favorite local coffee shops for their daily java fix. Residents of modern loft spaces carried their new artisan accent pieces, purchased at the hip artisan shop that has serviced the neighborhood for 20 years. Buzzing tourists frequented hotspots, excitedly choosing brunch locations based on elaborate menus posted outside. These neighborhood staples created a sense of community, and championed a hyper-local economy. According to real estate investment mogul Stephen Bittel, these thriving and evolving live-work-play communities were important hubs of activity. Within these hyper-local economies, urban retail spaces served as the backbone for continuous prosperity, growth, evolution, and economic opportunity.
Now, as the country collectively works to figure out the “new normal”, this concept of hyper-local communities, commercial real estate investment, and the building up of local economies will be integral to regaining a thriving existence. With over thirty years of leadership experience at Southern Florida’s Terranova Corporation, CEO Stephen Bittel’s investment in the urban retail scape has helped to shape the growth of Miami, and surrounding areas. According to Bittel, the way to regain Miami’s bustling hyper-local economy lies in continued commercial real estate investment in the area.
Commercial Real Estate And Local Spending Power
The presence of thriving businesses within any community creates a potential cycle of wealth. Recognizing the tertiary and all-encompassing benefits of strong community business presence, Bittel has built his commercial real estate investment portfolio on the founding principle of maximizing a business’ value through real estate. Launched in 1980, Bittel’s Terranova has garnered control of over $1 billion in commercial real estate assets. His vast experience with the potential of transforming businesses through attractive real estate has rendered Bittel well versed in the “big picture” benefits of local business.
Essentially, when an underserved community presents attractive real estate options for small businesses, as well as large-scale chain operations, these businesses have a viable incentive to move into a new community. As Bittel mentions, this sparks a chain of effects that impacts the entire community. The business obviously requires employees, who may be composed of local residents, adding opportunity and hyper-local spending power through the salaries of local employees. The business also partakes in local taxation, lending added funds to local public-use infrastructure. These beautification efforts then invite additional residents to relocate to the evolving area, and incite developers to provide new housing to meet rising residential needs. Finally, with increased activity, Bittel points to an inevitable increase in interest from additional commercial businesses. This cycle continues to perpetuate itself, modernizing and evolving a local community through continued reinvestment in local commerce.
As countless individuals rely on the economic stability of urban retail through their employment, the current pandemic has undoubtedly eliminated an income for these individuals. Thus, it can be surmised that this limitation of hyper-local income has also negatively impacted the local spending economy. In order to effectively bounce back, Bittel hopes for a revived hyper-local spending economy, bolstered by the resurgence of local business operations, the return of local jobs, and the continued investment in commercial real estate properties to welcome new business ventures.
Tech And The Urban Retail Experience
While the modern tech boom, evolution of online shopping, and globalization have all somewhat pivoted the idea of a “local community”, and changed shopping habits, the concept of in-person shopping should be seen as different, rather than diminished. In thriving urban retail communities, local businesses can leverage technology to their advantage through convenience factors. In an era where a trek down to a local eatery is precipitated by an hour-long search for recent reviews of the restaurant in question, urban retail businesses can effectively marry technology with good old fashioned customer service to provide a modern, immersive, and effective experience.
As Terranova provides extensive commercial development and construction management services, Bittel has led countless brick-and-mortar businesses in the quest to build the infrastructure needed to provide seamless service, evolved experiences, and a tech-based operation. For companies that utilize the presence of in-person shopping experiences, along with an online shopping component, he has seen an emergence of “smart stores”. These increasingly intuitive in-person shopping experiences can track a shopper’s preferences, sizing, and even save items of interest, all things that can then be accessed on the brand’s website. A savvy shopper could potentially try on a pair of pants at a local store, decide to consider the purchase, and not have to return to the store physically for a second time to make this purchase. Instead, the shopper could go to the store’s website, input sign-in information, and seamlessly find the pants from the in-person experience, purchasing with just a few clicks.
In addition to marrying the in-person and online shopping experience, many local businesses can use technology to leverage a convenient experience. For hospitality and food vendors, utilizing “order ahead” technology can entice customers on a time restraint, and eliminate the seemingly old-fashioned prospect of “waiting in line”. While individuals still desire to experience in-person experiences, their motivation to leave their homes may be increased by the elimination of previously accepted frustrations.
Pivoting Personal Interaction
Though many companies have experienced a surge of online shopping preferences, in-person experience continued to be in high demand. Pre-Coronavirus, these experiences have become more immersive, and have pivoted to pique the evolving interests of new generations of urban retail consumers. Thus, the commercial real estate industry sought to follow suit. “As developers, we have to make it worth it for people to get off their couches, leave their residences to go experience something in the physical world. We need to create authentic experiences for personal interaction,” said Stephen Bittel in a recent press release. “Millennials have more spending power than other generations, and those millennials are willing to leave their homes for one thing, a unique experience they can tell their friends about on social media. They are our future and we must ensure they have rich, resilient opportunities to build the community connections that they will need to meet the challenges of their time.”
Urban retail businesses have taken this insight to heart, spearheading various initiatives that provide an immersive experience. From interactive public-infrastructure displays lining retail corridors, to in-store Instagram-ready displays intended to become photographic backdrops, proactive approaches to capturing immersive experiences were popping up in urban retail. Playing on the global popularity of FOMO, urban retailers have enacted “limited time only” experiences, driving hordes of individuals to a particular location, encouraging commercial activity.
On the development end, commercial construction has shifted to impart infrastructure made to champion the idea of a comprehensive experience. From stores that seem to blend together as a “retail town”, to oversized beach chairs on public-use greenery spaces interlaced with shops, developers have worked to integrate a wholesome experience into a mere “shopping trip”.
In the coming months, as the country’s retail hubs start to reopen, recreating this concept of an experience will be imperative to garnering successful operations. Navigating safety concerns, and unprecedented challenges, commercial real estate investors and management companies will have to find creative ways to welcome back the idea of a can’t-be-missed experience.
For Bittel, urban retail is an integral part of any thriving local community. The direct impacts of these centrally located commercial spaces are undeniable, and contribute to the hyper-local economy. Growing in strength throughout the last few decades, and outpacing the economic power of suburban retail, urban commercial real estate continues to showcase promising potential post-Coronavirus. As local communities begin to open for business, residents collectively look forward to reigniting the cycle of success associated with thriving urban retail.