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Outdoor Shopping Leads Retail Recovery

The popularity of open-air shopping centers is on the rise, according to The Wall Street Journal (subscription).
The surge: “Landlords filled 17 million square feet of additional real-estate space in open-air shopping centers last quarter, a 49% increase from 2019, according to commercial real-estate services firm CBRE Group Inc. That marks a 10-year high for net absorption, or the total space occupied minus what has been vacated.”

The spaces: These outdoor shopping centers include everything from large, open-air shopping complexes to strip malls featuring flagship retailers like grocery stores. Grocery stores are important “anchor” stores for outdoor shopping centers because they benefited from the pandemic-induced shift to at-home cooking.

The reasoning: Population shifts toward the suburbs during the course of the pandemic have put more people in proximity to these open-air shopping spaces. The increase in remote work over the past two years has also made it easier for people to shop at centers close to their own homes during the weekday.
Mixed-use development: Outdoor shopping spaces are being used for a variety of purposes, including for events like live music, outdoor movie nights and yoga classes to draw foot traffic. In some cases, these outdoor shopping facilities are also being used as distribution and fulfillment hubs to meet the growing demand for last-mile warehouses.

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