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CBRE Group, Inc. Sees Rise Of Multi-Channel Retail Creating Opportunities For Retail And Industrial Real Estate

Los Angeles, April 9, 2013 –The growth of e-commerce combined with the consumption habits of echo boomers -- the children of baby boomers -- will spur the growth of multi-channel retail strategies, according to a new report from CBRE Group, Inc. While the growth of these strategies poses challenges for traditional brick-and-mortal retailing models, it also provides numerous opportunities for retail that will impact real estate markets.

CBRE’s “The Future Impact of E -commerce on Industrial and Retail Real Estate” finds that the need for multi-channel strategies will create new opportunities for retailers, such as programs that allow consumers to purchase a product online and pick it up at their convenience at a locker in a local store. Additionally, popular same-day home delivery strategies will likely require that future distribution centers be proximate to consumers, which should create increased opportunities for urban in-fill development. Furthermore, markets near UPS or FedEx hubs are most likely to attract major distribution centers to service e-commerce sales.

“The challenges facing retail real estate markets due to the rapid changes taking place in how and where consumers shop goods are well known but there are also substantial opportunities in this evolving environment,” said David Egan, Director, Research & Analysis, CBRE.

Other notable findings from the CBRE report include:

  • The market for urban high-street retail remains robust as prime retail rents, especially in coastal gateway markets have either reached, or are approaching, all-time highs. This can be partially explained by the fact that high-street retail offers shopping-as-entertainment and non-commoditized products. 

  • Seasoned e-commerce companies are opting for build-to-suit (BTS) developments that can provide increased infrastructure, heavy power, higher clear heights, an abundance of land and are located in 24/7 zones.

  • Retailers, particularly apparel chain stores, continue to combat the trend of consumers treating a store as a “show room” for products that may ultimately be purchased online. As consumers are provided more purchasing options online, stores engaged in core e-commerce sectors are now more vulnerable to lower profit margins, likely translating to lower rents for strip and power centers that cater to these types of tenants.

  • The aging of the U.S. population, coupled with the implementation of health care reform, is expected to increase demand for medical uses in retail centers.

 Note to editors/journalists: For a full copy of the report email robert.mcgrath@cbre.com.  

About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2012 revenue).  The Company has approximately 37,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.

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