Retail Insights for 2024 with Brandon Isner

In this episode of Leaning In, we welcome Brandon Isner, thought leader in retail research. With over 15 years of industry experience, Brandon is a prominent voice in retail real estate.

Alongside host Tommy Miller, Trademark’s Managing Director & CIO, Brandon shares valuable data insights on the current retail landscape, including resilient consumers, the role of stores in the supply chain, and the reinvention of malls. He also discusses shifting consumer spending patterns, the changing role of retail spaces, innovative concepts, and the impact of public perception on the industry.

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Tommy Miller: Brandon, it’s great to have you on our podcast. I’ve enjoyed our conversations over the last several years. Why don’t you introduce yourself to the audience, I’m sure many of them know who you are, and tell us about what you do and a little background on your career and what you focus on at CBRE?

Brandon Isner: Well, thank you, Tommy. I’m happy to. So, my name is Brandon Isner. I’m the head of retail research for CBRE for the Americas. I’ve been with CBRE for a little over 10 years now, which it’s always been in research, which I’ve kind of found to be my happy place. I’ve had a lot of different careers throughout the years, and this will probably be my last one, so I’m happy to be in it.

I started with CBRE when I was getting a master’s degree in urban studies and urban planning. So those two worlds just kind of meshed pretty perfectly. And I had expected to go into the nonprofit sector, perhaps working for a city and within city planning. But my role, so I started at CBRE in Cleaveland, and so my role there was helping a lot of our brokers and their clients. Obviously, I helped them make the best decisions possible about their real estate. So, in turn, that almost helps the community and community development even more than on the nonprofit sector.

And then, on top of that, I also work with some nonprofit community development organizations on certain projects, such as brainstorming on how to invigorate urban retail spaces. That’s been a hot topic lately. So basically, I’ve got a lot of latitude with my role at CBRE and it’s a lot of fun.

Tommy Miller: Terrific. Well, why don’t you give us the CBRE and Brandon Isner house view on the economy and the forecast for the rest of ’24 and into ’25 and the Fed and election? How do you read the current state of the economy?

Brandon Isner: Sure. Well, on the on the retail side, on the retail real estate side, it’s been kind of an interesting stew within retail because a lot of people are surprised to find out that retail fundamentals, they’re at the best levels that they’ve been for a lot of our brokers’ careers going back 20, 30 years. And retail availability remains at an all-time low when taking into account the entire US market of what we track.

Retail leasing activity has slowed a little bit, but that said, many retailers are sticking with their expansion plans, and again, this is coming at a time when we’re about to set another new record low for retail real estate development. For a fifth consecutive year, we’ve established a new record low in new space delivered. And so that ensures that retail availability will remain low, especially in prime retail areas, which will keep rent growth solid, and it’ll keep those fundamentals strong.

Regarding the Fed rate, that’s usually the work of Richard Barkham and Darren Malott on our team, but that said, in regard to how everything will react to the federal funds rate, but as of right now, CBRE’s house view is that inflation and economic growth, they’re going to slow enough to justify two cuts beginning in September, high interest rates, cautious Fed, that’s going to keep real estate capital markets activity subdued. But it should improve a little bit later in the year. Leasing activity overall, not just in retail but overall, will probably remain resilient, although we are going to experience slower economic growth.

And then, obviously, we have an election coming up. So, with any election cycle, companies might be more cautious with their plans before and shortly after. So, it’s going to be interesting to see how that plays out. So, it could be that at the beginning of 2025, we see a wave of activity. But that said, going back on the retail side, there’s a lot of retailers that are sticking with their expansion plans, as I said, and will need to meet those expansion goals before the end of the year. So, they’re staying full steam ahead.

Tommy Miller: Yeah, we’re seeing that in our business as well, and that is something we’re closely monitoring, but despite what’s been happening in the economy, the retailers, not only do they seem to be sticking to their plans and very few of them backing off, but they also seem to be stepping up to the rent levels that are required to cover the cost of new construction, which is an interesting sign. And that’s one shoe that could drop, I guess, if the economy, if we slip into a recession, I guess. But it’s interesting that the retailers are still full speed ahead.

Brandon Isner: I think some of that, too, comes from, and this is something that we haven’t had a full-blown report on yet, but you mentioned something interesting right there in that retailers are sticking with the rent growth and there’s even some markets now where there’s new construction justified.

And I think a lot of that comes from just the the changing tide of what a store is used for. Stores aren’t just a place to sell stuff anymore. They’re not only a showroom, they’re not only a place to sell stuff, but more and more stores are becoming more active participants within the supply chain. And that acts in both directions. That’s with curbside pickup, but it’s also with reverse logistics.

We did a study back in 2022 – well, we released the study in 2022, our Global Live-Work-Shop survey. And it found that over 50% of people that buy things online, if they have to return them, they prefer to return them in store. And retailers love that. That’s one last chance to create a bond with a customer or to re-establish a relationship with a customer that might be dissatisfied. I think we’ve all seen the videos of the third-party delivery drivers that have a rough job chucking boxes over fences. Sometimes that’s the only representative of the brand to their customer.

And so, retail brands, they want to have their person have that relationship with their customer. And so, when those items are returned in store, that’s a big benefit, even if it doesn’t result in another sale, but at least you can pacify the disappointment and maybe stave off a bad review or maybe keep the customer for maybe future reattachment. And I think it’s really interesting.

Forrester, which is a great think tank and data center, they did a report last year that found that click and collect sales can boost a store’s sales by around 10 to 11%. They did a study of 60 different multi-channel retailers, and that’s what they found. If you think about that, that could eventually go into the renegotiation of rents as well. Retailers that are on buy sale rent where that’s a part of the rent structure, there could be reestablishing what that means, how much of those e-commerce sales are being fulfilled at the store level with people that are using the parking lots and coming in. So, again, the store evolution has been so fast that I think a lot of this we’re just figuring out for the first time.

Tommy Miller: It’s become the true last mile, the retail store. I remember early on when you were talking about stores doing fulfillment within the store, a lot of people were saying, oh no, it’s really all going to happen at distribution centers. That’s the last mile. Even small stores are the last mile. And you had mentioned an easy, had an interesting quote that we got out of an article that you put out. You were pushing back a little bit on the meaning of omnichannel retail. And have we moved past this idea or this label? What exactly did you mean by that?

Brandon Isner: One of the things I think that we talk about, that term is thrown around a lot – omnichannel retail. Is a retailer omnichannel or not? I think we’re almost to the point where it’s just retailing.

I spent some time at the Shop Talk conference in Vegas earlier in the year, and it was really fascinating to hear the retailers talking with each other, not on a real estate basis but on a business basis. The word omnipresent kept coming up, and it’s interesting to think about that. Omnipresent is being where your customers are wherever, whenever.

And so, if you think about how retail is evolving through the store platforms and they want to be at the- for the physical expansion, retailers are using very detailed and very complicated location intelligence data to know exactly where their customers are. Where can we locate where we can really tap into this trade area? And so then on top of that, they also have the e-commerce data. And so, if you have a good web platform and a good app and your customers can reach you at one in the morning when they can’t fall asleep or during the day on a convenient way to and from work, that’s what they’re thinking about.

And so, again, omnichannel, not that it’s a bad word, but you almost have to, if you want to compete on a national platform, you really have to have an omnichannel platform and have a great app, have a great store distribution. And that part is the really interesting thing. As more and more of the direct to consumer e-commerce platforms realize, e-commerce retailers realize that they need a store presence to really engage their customers, that’s been interesting to watch as well. And so, again, I just think omnichannel, it’s almost synonymous with retail.

Tommy Miller: So, what’s your view on the state of the consumer today? Another maybe perhaps overused word, the resilience of the consumer. Are we starting to see any cracks in consumer spending, balance sheets, debt? How much evidence is out there that the consumer might be potentially pulling back a little bit?

Brandon Isner: So, consumer spending up until now, it’s been somewhat resilient, but I agree that there’s been a bit of a slowdown. The May 2024 retail sales figures were just released, and they underperformed forecasts a bit. And previous months were adjusted lower than previously reported. And so, I think that this is the moment where people are really starting to think about their spending and taking a step back.

One thing to note that’s really interesting to me is that food and beverage services, which have been so strong for so long, they’ve definitely slowed. So in Q1 2024, sales totals for food services and drinking places, although they’re still up year over year, they’re up about 5% year over year in that quarter, but they were down from the previous quarter. So, from Q4 ’23 to Q1 2024, they fell. And that was only the third time in the last decade where there’s been a quarter over quarter drop, and now I’m not counting the pandemic related influences. Obviously that really hurt restaurant sales. But in a normal quarter over quarter comparison, again, that’s only the third time over the last decade that that’s happened.

And why is that? With retail, it’s always interesting. And that’s why I tend to enjoy my job. But there’s a lot of theories on why that is. Some are saying, well, people are just spending less at restaurants. But then others will say, well, maybe they’re just making different choices. Rather than going to a sit down restaurant, perhaps they’re going to a quick service restaurant or a fast casual restaurant and just minding their budget a little bit more that way. So, it’s a cheaper overall experience, although they’re still going out to eat. So, there’s a lot of factors that could be baked into that.

But then again, there’s some categories that have started to come back a little bit. I thought it was pretty interesting that clothing and clothing accessories, they’re up almost a percent month over month, from April to May. And then year over year, they’re up about almost two and a half percent. So that’s a category that was kind of struggling for a while, and that started to come back a little bit. So, it really is like a category by category spread, but overall, you’re right, spending has pulled back a little bit.

Tommy Miller: Any findings in your latest reports on rent growth and spaceability that surprised you or jumped out at you? And maybe if you could give us some discussion of retail statistics across the different types of retail, community, power, lifestyle, is it across the board or are there sectors that are better or worse than others?

Brandon Isner: Sure. So, one of the most interesting things that I’ve observed with our last report, with our standard quarterly report is that- so I’m originally from the Midwest. I’m in Miami now, but I’m originally from the Cleveland area. So I always am interested in what happens in the Midwest. So in that quarter, in Q1 2024, four of the top five markets in retail net absorption were in the Midwest. Chicago was the number one market, Minneapolis was the second highest market, and then Miami, and then Cincinnati and St. Louis were lower than that, were four and five.

And it’s interesting because retail has- retail is interesting because there’s a very large exposure to public perception that retail has to deal with. Because retail is for the people. It’s part of our society. We walk through these districts all the time. And so, I think that someone with no real estate knowledge whatsoever could see a couple of stores vacating in their mall and realize, hey, there’s something going on here, or on their main street, see a couple of stores vacate and say, hey, maybe this area is struggling.

And so, I think that a lot of the downtown areas have had a little bit of struggle, not all, but overall, the vacancies started to increase a little bit versus suburban markets. And in fact, we do this study where…

Tommy Miller: Is that office vacancy driving some of that, less people, more people working at home, some?

Brandon Isner: I’m sure it does, but there’s some other factors there too. So, just quickly, back 10 years, urban retail real estate has always had a lower availability rate than suburban. With the exception of the last two years, that’s suddenly reversed. And so, yes, I think what you’re saying, office attendance probably plays a part in that.

But then going back to the multi-channel capability of the store, I think that plays a part too. If you think about it, with curbside pickup and being a part of the supply chain, it’s probably easier to run a lot of those out of a suburban store where there’s a big parking lot. There’s a big alley behind with possibly a loading dock if it’s a strip center. And it’s just easier in and out for curbside pickup. And so, they can benefit from that business.

Whereas in an urban store, not to say that they can’t do that, but it’s probably a little bit easier to adjust a suburban store to meet that kind of just pop in and pop out demand. Because urban stores, parking can sometimes be a problem. You can walk to them, obviously, and they usually have a population around it that they’re supporting the population in the buildings around it, but for curbside pickup, the strip centers make it really easy. So that could play a factor, too.

Tommy Miller: In our portfolio, there’s a lot of strength in high quality suburbs. I call them almost like bubble suburbs. There’s a little bit of a flight from the middle of the city to these places, and these people want the retailers to come out to meet their needs where they live. They’re almost demanding it. And that’s an interesting trend that I see developing in almost every city in America.

Brandon Isner: Well, that’s a good point and that’s what I was going to get at. Regarding these Midwest markets, like a market like Chicago, there are certain areas of Chicago’s downtown that have had issues, but people sometimes forget about these historic, well-established suburbs that surround that city and just a very stable population, you have the deep-rooted institutions of learning and arts and all that.

And so, it’s just a very solid population. And there’s a lot of disposable income in those suburbs. And the same thing with places like St. Louis and Cincinnati and Minneapolis. Again, it’s not to say that the downtowns will struggle all the time, but often people forget about those suburbs because they just don’t travel there often because they don’t live there, so there’s no reason to. That goes back to the whole idea of these suburbs, like you said, they’re very strong, and a lot of retailers have realized that and I think are adjusting some of their expansion strategies to meet that.

You could probably tell better than I could, but I’ve noticed that a lot of strip centers are starting to ease their co-tenancy restrictions. Maybe they didn’t want a restaurant before, but now they do. Or maybe they didn’t want pickleball and a beer hall, but now they do. And so, they’re making those things work because you have these retailers seeking that space and they want to be there because it’s closer to their customers.

Tommy Miller: And they’ve learned that, to your point, very interesting, the retailers, it used to be that if you lived in the suburbs, you had to come downtown for some shopping needs because that’s where the biggest department store was or your favorite restaurants. Now there are less and less- these suburbs are so well served and the retailers have figured that out that they’re creating these communities that are almost self-sustaining, so a little bit of disconnection from the center of the city, which is, I guess, good and bad, but that’s very interesting.

Brandon Isner: I agree. And there’s some things that you’re never going to be able to replicate from cities like, going back to Chicago, the Goodman Theatre. No one’s ever going to recreate the Goodman Theatre. It’s there. And so, things like that will always be a draw. But you’re right. And that also comes from people just wanting to spend less time in a car. That’s come up where people want quicker commutes and maybe will take an Uber instead and don’t want to go all the way downtown. So it serves everybody. It’s just what the market demands, and it appears to be working quite well.

Tommy Miller: You mentioned new development, and that’s something that we’re seeing in our business that there’s all of a sudden, in some of these communities, there is a need for new retail. And of course, we haven’t built any significant amount of new retail in a decade or decades. That seems to be coming. I think there’s a need for some new supply. There’s just not much availability. The question I guess is will the capital markets support new development?

But across your coverage in the country at CBRE, are you seeing some new development activity increasing across the country?

Brandon Isner: Well, like I said, I think we should, but I don’t think that’s necessarily happening. And again, I think part of just the whole transformation of retail could be playing a part here too because let’s look at it. Nobody’s building malls anymore. That’s probably not going to happen anymore. And then power centers, I think that there’s a little bit of nervousness about that. But the grocery anchored centers are one thing that continues to be built. But really, the only real true retail where it’s actually increasing on a per capita basis are like the standalone stores, like the quick service restaurants with the drive-thrus and all that.

And so that part is increasing, but I agree, we haven’t really seen a lot of new center construction. And it might be time because a lot of retail that was built in the mid 2010s was part of a mixed-use community, and so it might have been in the ground floor of an apartment building, which that’s great for some uses but it’s not great for all uses. Again, going to talk about curbside pickup and whatnot, sometimes having these centers with the big parking lots and easy in and out, that’s what retailers are looking for. And development costs remain really high. You can’t build retail vertical like you can the other property types. So yeah, it does remain a challenge.

But one thing I think we will see when everything finally starts coming back, and there’s a little bit of this going on already, but I think we’ll see more and more, is just the reimagining of current retail sites and reinvigorating those. Ironically, some of that could actually reduce the overall square footage of real estate. If you take an abandoned mall and create an open-air center from that, you might actually have reduced the overall GLA, but you’ll make the space more relevant and it’ll reoccupy because it’ll be more apt to handle modern day retailing.

Tommy Miller: Yeah. And there’s a trend that we’ve noticed, I think there was even an interesting conference going on at the Las Vegas ICSC, where it’s becoming really important for these shopping centers to be, quote-unquote, on brand for the retailers who are looking to the next generation of shoppers who just expect something different.

And when you’re looking at a bunch of 20 and 30 year old shopping centers, there’s going to be a need to sort of modernize and make them reflect the aspirations of the next generation. So, I think that’s spawning some change out there and perhaps some redevelopment and new development.

Brandon Isner: I agree. You think about something just like parking lots and how there’s not really been much done with parking lots. It’s still just a sea of spaces and people are walking down the middle of the aisle while cars are trying to drive by them. And there’s a lot of opportunities. And I think something like EV charging, that’s one that a lot of people are on top of.

But I think we could see more monetizing parking lots or developing the parking lots to be more of an experience than just walking through slush into a store. Maybe instead, there’s a coffee kiosk and a couple of stores along with that that you can have a coffee when you walk in, things like that. And I think we’re seeing that. I think that we’ve seen a lot of those 1970s, 80s seas of parking lots be rethunk a little bit – is this thunk a word? I think it is – be rethought a little bit on how it’s used.

Tommy Miller: Yeah, like I saw a center in Austin recently, a fairly conventional 20 year old shopping center with just multiple, multiple, I don’t remember how many Tesla charging stations, and it was filled with cars. And previously, you might have seen these people pulling in and taking their 20 minutes to recharge, just kind of fiddling around and had no place to go. But now, they’re going to be spending more time at the shopping center, give them something to do and make it part of the experience. So that’s a great point.

One thing that I saw that we continue to see is that foot traffic, this is Placer data or wherever you get it, it doesn’t seem to be all the way back from foot traffic pre-COVID, yet sales are surpassing pre-pandemic level. Is that inflation driving that or different trends? Have you studied that dichotomy there?

Brandon Isner: Yes, I think that inflation definitely plays a part, but I think there’s another story there too. This kind of goes hand in hand with some of the high street retail. We’re seeing a lot of retailers focusing a little bit more on their top tier of customers and trying to expand services and goods for them.

And so, we’ve seen this through establishment of branded private clubs, loyalty programs, special offers and experiences only available to a certain level or tier of customer. And a lot of retailers have been able to extend these types of offerings. And they can still hold steady with their casual customer, but you can make that bond with your top customer stronger. And I think that’s, what’s it called? The Pareto principle where the top 20% is where… and I think that the retailers know that. And I think that expanding those offerings and expanding their spending can elevate their sales while not necessarily increasing foot traffic.

And interestingly enough, there are some of these urban areas, they’ve completely rebounded on their foot traffic from pre-pandemic levels and even surpassed them. Places like Newberry Street in Boston is outperforming. Fifth Avenue is right back to where it was. But that said, I think that-

And again, it just goes back to the idea of retailers getting better at their jobs and being wherever and whenever their clients are. And so, you can make a sale without necessarily having them in the store. If they were there the week before or whatever, you can opt for something new over the app or a special experience that might just need one visit. So again, it’s just the idea of being more efficient with their overall business.

Tommy Miller: Yeah, well, that’s super interesting. Well, you’re out there looking at shopping centers all the time across the country. What new retail or F&B, entertainment, what concepts are you excited about, or interesting retailers that are doing something different? What have you seen out there interesting that’s got your attention or your brokers’ attention?

Brandon Isner: I think that it’s, obviously, again, just the idea of experiential retail coming into focus and retailers looking at that a little bit more, taking their core amount of customers and elevating that before seeking out other customers. And so, we’ve seen just a lot of retailers just kind of upping their game that way.

As far as new retail concepts, obviously pickleball continues to rock the world. I was actually walking, after ICSC, I took a weekend in Los Angeles afterward, and I was walking through the Third Street Promenade in Santa Monica, and there’s a new pickleball concept there where they’re actually looking to, they’ve taken space and I’ve heard that they’re actually looking to expand even further into the next storefront. But yeah, you look through the door and there’s full-blown pickleball courts and there are people in there really going at it. It’s kind of a neat thing.

And again, it’s just that idea of 10, 15 years ago, that might not have been conceivable to have a concept like that at the Third Street Promenade, but it seems to fit in really well now that there’s a lot more food and beverage along there. And so I think that’s interesting.

And I think that, again, just the idea of these retailers that have usually had an online presence establishing their self a little bit more in brick and mortar retail. They’ve realized that you can only go so far with an e-commerce presence and so a physical retail store is also necessary to establish the brand.

And then on top of that, I think it’s really interesting seeing how many brands, and I kind of mentioned this earlier, but how many brands are also offering some type of food and beverage or cafe concept within their store to kind of encourage hanging out a little bit more. That’s something that we’ve seen, and it’s just another way to attach to a customer in one more place.

Or on the reverse, if you’re a luxury retailer where you have people that might be curious but a little intimidated about the prices or talking to someone, what better way than to have a cafe attached to your store and invite people in that way and get them comfortable that way. And after a few visits, hey, you know what, maybe I’ll take a look at a watch or a ring or something. And I think that’s innovative as well. So, those are just some of the observations we’ve made.

Tommy Miller: Constant innovation continues to be a theme in our business. Well, I thought one interesting thing that has been going on the last couple of years, I’d love your comments on it, but the creation of this new scaled, large-scale companies that are investing in small neighborhood retail unanchored, the site centers, the curb line concept, and I know some other investors creating big businesses out of small retail strips and pads. Do you have any thoughts on that? I’d say it’s not new but the scale is new. The big companies are focusing on that particular sector.

Brandon Isner: Yeah, it is interesting, and I think that, again, you kind of hinted at it, but when you take a step back, it makes perfect sense and you think, wait, why wasn’t this going on forever? Because a lot of these, you mentioned unanchored strips, a lot of these are convenience centers that are day-to-day trafficked. They’re almost recession-proof – places like a doctor’s office or a vet clinic or a hair salon or a nail salon or a phone store or a convenience store. And those are leases that will probably turn over a little bit quicker than having a gigantic anchor, and so they’ll remain market rate a little bit more. I think it makes perfect sense.

And on top of that, it’s also a way to really get a good gauge of what a community is about as well. Once you have that asset, you can really see how your knowledge about that community will increase and it could extend into other opportunities in that community.

I’ve often said that, and this is no surprise, but that just as retailers, I mentioned earlier, have kind of changed their focus on where they might locate, there’s a lot of retailers that are looking at off mall strategies now where if it’s a recessionary time and you’re kind of cutting back on your everyday spending, you might not visit a mall, but you’re still going to visit the grocery store. In fact, grocery stores actually excel in times of recession because people stop eating out at restaurants. And so, if you’re heading into the grocery store, but see a footwear store, you think, you know what, I need a pair of socks. I’ll go in and grab those. You might not have noticed that. You might not have stopped by an indoor center and made that conclusion, but having the store frontage and an outwardly facing sign, that’s beneficial for a retailer.

But it doesn’t have to be a grocery-anchored center either. It’s just those convenience-based centers and having street signage and having your brand out there, not just in a storefront within a mall but also facing the street, I think it’s incredibly valuable. And so, as retailers are kind of reassessing where they locate, I think it’s a good idea to get into that game right now.

Tommy Miller: Yeah. And what are you seeing in the mall sector, which was probably the sector that was most on attack, if you will, a while back and the future of the mall? But we’re actually seeing some mall performance with strong cash flow and rents, even though the mall really hasn’t changed that much. And it’s sort of flying in the face of what everybody thought was going to happen 10 years ago, while some are going away, but the strength of a certain quality of mall, they’re not going away. There’s very strong cash flow. Have you thought about that?

Brandon Isner: No, I’m glad you brought that up. Malls have kind of become a bad word, but you’re right. The top tier malls, the ones that are managed well and maintained well and with active management have continued to perform very well. There’re all-time high occupancies at a lot of them, continued interest in new tenants.

It’s really just one of those things where normally I discredit the phrase that the US is overbuilt on retail because I don’t agree with that. But we probably do have too many malls. I think that when you look at the struggling malls, a lot of them, the only real issue is it might just be the third best mall in a great trade area and there’s just not enough space for that. That doesn’t mean that it can’t be viable retail, but just that type of retail might need to be reimagined.

Again, we’re seeing that. There’re some projects going on where an obsolete mall might be razed, the site might be razed, and they just build an open-air center instead. Or even take some of that that sea of parking lot and build an apartment building or a hotel or maybe a medical office, something like that.

But you’re right, there’s still a place for malls. People enjoy going to malls and taking an afternoon and just getting into that comfort zone. I’m a Gen Xer, and so growing up, malls were our escape. We’d get out of the house, and we’d go to the mall and look at the stores, and if there’s a comic book expo, we’d go for that, or we’d go see a movie and all that. And so, a lot of that nostalgia still exists, and it’s really coming into its own as Gen X gets into our final chapters. And so there’s a lot to like about malls. I just think that there’s many out there that need to have some sort of reimagining or repurposing.

Tommy Miller: Yeah, the department store sector still seems to be the one questionable part of retail today and I think that is playing out. We just replaced a vacant department store box with a Netflix house concept, which you’ve probably read about, but the department store, that seems to be the one soft spot, I mean not all department stores, but there’s still going to be- That’s the one place where you’ll probably see some reimagination and potential vacancy.

Brandon Isner: 100%, and if you think about how just the overall gathering the control of that, of those boxes, often they’re owned by that entity, and that’s remained a challenge as well. But I agree. And we’ve seen that in some places where, when a mall is reimagined, that they’ll demolish some of the anchor stores and leave everything else. Because in a lot of those places, the big department store used to be the foot traffic draw. They’re not anymore. It’s the smaller stores that are the draw.

Tommy Miller: And one last question for you, and then we’ll open it up a little bit, but you’re on the front lines of research with CBRE clients, and I’m just curious, we’re seeing institutional interest in retail real estate, maybe this is a by-factor, a factor of the decline of office and sort of the stabilization of the apartment and industrial world, that now there seems to be a lot of what I call white papering going on at major institutions about we need to increase our retail shopping center investment allocations, if you will.

What have you guys been seeing in that world? And maybe you’re the perfect person to ask, given that they’re all sort of making the case for their next fund. We haven’t invested in new retail for 10 years, but maybe now’s the time. I’d love your thoughts on that.

Brandon Isner: Obviously, it’s where I spend most of my time. Personally, I feel it’s one of the most stable assets out there. Again, retail is part of who we are as a society. Those feelings of the physical store going away, that started back in 2009, 2010. That was before I was in my position because I wouldn’t have allowed that to happen. But so, I think, yeah, I believe retail to be a very solid asset. Again, it’s the supply side management of it, whether a lot of it wasn’t purposeful, but just the idea that supplies just remain so steady has really allowed fundamentals to catch up.

You kind of mentioned on the front line segment, so it’s interesting, and obviously, names are not going to come out, but I go to a lot of the cocktail hours and dinners around ICSC. I’ve met so many people over the last, let’s say, calendar 12 months where they’ll introduce themselves and we’ll start talking and they’ll say, I was just hired by this fund to start looking into retail because they’ve been out of it for a while and they’re looking at it for where to place capital. And so, I think that we’re going to see a lot of that. I don’t think it’s playing out in the numbers yet. There’s so much undercurrent of activity, more institutional capital taking a look. I think that you’re right, that we’re just going to see more of it.

And I think, true, and I don’t like to bad mouth other property types and the other property types are still quite solid, but I think it’s some of them where investors have been seeing double digit rent growth year over year, I think a lot of that’s calming down. And so, you take a look back at retail, and there’s very little that can upset the apple cart within retail. And so, it’s just going to be looked at as a very stable asset. It should be looked at as a stable asset. And I think that, again, the second half of this year and into 2025 are going to be really fascinating to see who starts placing capital there.

Tommy Miller: Great. Well, anything else that you’d like to talk about or topics we haven’t covered that might be interesting for the audience, that would be terrific. But I really appreciate your time. It’s been a great conversation.

Brandon Isner: Yeah, it’s been great. Again, I think the last thing I’ll just say is that, and this is just because it’s been part of my thesis quite a bit, that you’ll get it, it’s just really fascinating how I’ll still hear from time to time that the US is over retailed. And if you compare us to other countries, that can potentially be true. But again, retail is 60 to 70% of our economy. And so there’s a reason for that.

Development restraint has just really allowed our sector to remain strong. It’s going to continue to remain strong. And again, it’s just going to be fascinating to see what happens with companies like you and others and I’m looking forward to being on the ride.

Tommy Miller: Very good. Thank you very much, Brandon. Appreciate it.

Brandon Isner: Thank you.

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