Listen as Rappaport’s Senior Director of Brokerage, Patrick R. O’Meara, and Leasing Representative, Michael Leon unpack 2020.
Yikes – 2020 was quite a ride, but we have emerged on the other side of New Year’s Eve, into the dawn of 2021.
And there is a lot to be excited about, starting with the various Covid-19 vaccines being rolled out around the world, a development that many hope will usher in a return to things like travel and in-person events.
But before we count those chickens, so to speak, Rappaport staff members Pat O’Meara and Michael Leon took some time out to reflect on the year that was – 2020.
Here’s a summary of what they had to say, or watch the full video interview above.
1. We expected experiential retail to be a big deal in 2020 before we were sideswiped by social distancing. Can we expect this trend to move to 2021, or will people remain cautious?
Pat O’Meara (PO), Senior Director of Brokerage: Experiential retail was subdued in 2020 because of the pandemic, and we can expect some caution in the first and second quarters of 2021, but there is a lot of optimism for a recovery by summer 2021 – on the same kind of the trajectory as before the pandemic.
2. We anticipated that it would be a tough year for restaurants and food halls, but we couldn’t have known how bad it would be. How did restaurants pivot to stay alive in 2020, and what lessons were learned?
Michael Leon (ML), Leasing Representative: The biggest move was embracing takeout and delivery. Of course, many food outlets offered this previously, but not everyone did – especially the smaller or non-franchised places.
3. How would you characterize the retail industry in 2020?
PO: It is fair to say that in the second quarter of 2020, we were all in a state of shock – in retail and retail leasing, but since then, we have been in recovery and adaptation.
4. Who are the big retail winners of 2020?
ML: Large corporations and national brands like Amazon, Chipotle, Walmart, and Home Depot have been the big winners, especially those with a physical presence and online infrastructure. They were better able to switch lanes in the middle of the race. On the other hand, the mom-and-pop operations have been the hardest hit – and that breaks my heart. They didn’t have the same resources, but I know that we are going to see them bouncing back.
PO: Another big winner is drive-in restaurants. People are already very comfortable with that method of getting their food. The retailers who had a strong online presence were also better able to pivot when people stopped showing up in-store, and their fulfillment processes were already up and running, so there were few delivery delays to overcome.
5. From a commercial real estate perspective, how have brokers and landlords fared this year, and how have they partnered with tenants to mutual benefit?
PO: It’s been horrible in general for brokers, landlords, and tenants, and I would say that the resolve of all three to partner together and figure this out is fantastic. No one has dealt with anything like this before.
Working together was essential. For example, there were less evictions than there might have been. When it was feasible and possible, landlords showed their willingness to work with tenants, and vice versa. Some have more flexibility than others, and it was a case-by-case basis.
Brokers were in the middle, trying to make sure that both parties knew where each was coming from, playing the role of a mediator. I think we are now in a position where we understand where we are and that there is a light at the end of the tunnel.
6. What are your overall lessons learned or a message to close out the year?
ML: Life always has a lesson for you. Even in the craziest of circumstances, there is always something you can take away to be a better person and professional. For me, it was asking, ‘how am I providing value to clients?’ On a personal level, it was a reminder to cherish relationships, and prompted me to reconnect with some people I haven’t seen for a long time.
PO: It’s been really interesting to see how everyone responded to this thing and how everyone came together. Tough things are thrown at people, but if we work together we can come out the other side. Yes, we’re not out of it yet, but as I said, we can see the light. And a message to close out the year? Let’s get out of here. I don’t want to jinx anything, but it should only be getting better in 2021!
One example of a restaurant that did it well is Ciao Osteria, here in VA, which went into delivery early on. They also engaged with local communities and organizations.
The lesson is that you need to be nimble and responsive to change. Customers have preferences and we need to be able to keep up with this.