Adapting to changes in retail: Looking back on 2017 highlights
The idea of a “retail apocalypse” took off this year, and while many agree that the demise of retail is exaggerated, there is no denying that e-commerce is continuing to disrupt physical store sales. According to the ICSC Research Team and PNC Real Estate Research, almost 20,000 cumulative store closings occurred in 2017 compared to a little over 15,000 openings. Retail is changing, and with many brick-and-mortar retail store closings, especially in secondary markets, it is critical that shopping center owners rethink their asset class structure. In recent years we have further diversified our once-retail heavy portfolio to include mixed-use, office, residential, hospitality, self-storage, senior/student housing, industrial, and government asset classes. We have also completed three dispositions with the sales proceeds being reinvested into property types beyond retail in more densely-populated areas. RD Management has moved forward on three major developments in the non-retail space in the Northeast region. In Bridgewater, NJ, we developed a 133-room Hampton Inn & Suites in partnership with XSS Hotels. We acquired a 280,000 s/f, class A office property in Tarrytown, NY alongside GHP Office Realty and other private investors. Lastly, we signed Virtua Medical Group and announced the addition of 338 luxury rental apartments to The Shoppes and Residences at Renaissance Square, a mixed-use center in Marlton, NJ. Another project in the works for RD Management and Ekstein Development Group, a partner of ours on several residential and mixed-use properties throughout New York and New Jersey, is a 200,000 s/f developable building for residential dorms in Long Island City, NY. The $80 million development will offer 250 dormitory units to be leased to local universities, with construction starting in mid-2018. As retail continues to evolve each year, it is our job to adapt to the changes and see them as opportunities to expand upon our assets. Though we will continue to operate our core retail properties in major markets throughout the country, we will also take a critical look at those in secondary and tertiary cities that may not be performing as expected. We see value in strategically diversifying, and look forward to growing and strengthening our portfolio as a result. RD Management owns 62 retail, mixed-use, vacant land, office, hospitality, and storage properties in the Northeast and has more than 150 properties in its national portfolio. Richard Birdoff is principal and president of RD Management.