These have been challenging times for retailers. But those that are succeeding have adjusted their business models during the COVID-19 pandemic, focusing more heavily on curbside pick-up, delivery and online sales. This omnichannel approach has paid off, boosting the revenue streams of several retailers.
This can be seen in the Grand Rapids, Michigan, market. Colliers, in its first quarter Grand Rapids retail report, said that the retail sector in this slice of Michigan is now in growth mode. Colliers is also predicting that rental rates for retailers and restaurants will rise in the coming months because of a lack of available space.
Colliers’ report, then, paints a hopeful picture for Grand Rapids’ retail sector.
According to Colliers’ research, the West Michigan retail market has been resilient as the United States comes out of the height of the pandemic. The company predicts that this sector will see a rise in activity — sales, leases and new development — in the coming months.
As Colliers says, new stores and restaurants opened in the Grand Rapids market in the first quarter, and retailers have plans to open additional locations here throughout the rest of 2022.
According to Colliers’ report, the retail vacancy rate for the Grand Rapids market stood at 6.23% in the first quarter, while net absorption fell to a negative 52,644 square feet. Colliers says that 172,194 square feet of new retail space was under construction as of the end of the quarter, while overall Class-A asking lease rates rose to $13.91 a square foot.
Those numbers still indicate a sector that is struggling with the pandemic. The vacancy rate for the Grand Rapids retail market, for instance, was up from 5.85% in the fourth quarter of 2021. But Colliers does predict that all of these numbers will improve as 2022 moves on.
There are challenges, too. Colliers says that many retailers continue to struggle to find labor. They are also dealing with shortages of the items that customers want, with the current shortage in baby formula an example that has been generating headlines. At the same time, a shortage of construction materials is making it more difficult for developers to finish retail projects on time.