Black Friday Recap

Video Index:
0:00 Update on retail sales during Black Friday
1:55 For Sale: Office Condo in Irvine
2:24 Meet me at ICSC’s Here We Go 2021 event in Las Vegas
2:55 Casinos are backfilling department stores
4:35 Amazon shifts focus away from leasing and toward purchasing its properties
6:36 Hospitality occupancy increases as business travel picks up

Hello Investors!

Are you going to ICSC’s Here, We Go 2021 event in Las Vegas next week?  If so, let’s meet up!  Reply to this email to set up an appointment for us to meet.

Black Friday Retail Sales update


RetailNext, which tracks shopper counts in physical retail locations nationwide with cameras and sensors, reports that Black Friday’s US retail sales were up versus last year, but still far below 2019 levels. Their data indicate that store traffic was up 60.8% on Black Friday compared to last year, but down 27% from 2019.

According to Adobe Analytics, Online retail sales were slightly down on Black Friday this year compared to last year, at $8.9 billion versus $9 billion.  Online sales on Thanksgiving Day itself were flat at $5.1 billion, which is the first time that sales didn’t increase since 2012 when Adobe began tracking those sales.

However, according to Salesforce, online sales for the first three weeks of November have been up by 10% versus last year.

People have been shopping earlier than usual, either because they’re afraid of supply chain shortages, or simply because the holiday shopping season seems to be inching earlier next year.
So more purchases in the weeks leading up to Black Friday would suggest less need to buy on the day itself.

Just Listed For Sale: Office Condo in Irvine


This office condo is located at 17500 Red Hill Avenue in Irvine, right at the intersection of Red Hill and MacArthur.  It’s about 3,000 square feet and it’s fully built out with an open floorplan.  Check out this link for a 3-D virtual tour, or click here to learn more about the property.

If you or anyone you know is looking for office space in the heart of Irvine, please contact me and I’ll be glad to tell you more or arrange a tour.

ICSC’s Here We Go 2021 event in Las Vegas


This weekend, I’m headed on my first business trip in a year and a half.  On Sunday, I’ll be heading out to ICSC’s Here We Go 2021 event in Las Vegas and I’ll be there until Tuesday afternoon.  As of today, over 8,600 people are registered, and over 10,000 are expected to attend.  In prior years, the RECon show in May would bring about 30,000 attendees, so this is a bit of a smaller show, but I expect that it can be just as impactful.  If you’re planning to attend, please call, text, or email me and we can meet up while we’re there.

If you or anyone you know is looking for office space in the heart of Irvine, please contact me and I’ll be glad to tell you more or arrange a tour.

Casinos are backfilling department stores


One of the biggest challenges in retail real estate in the past decade is the repurposing of vacant big-box spaces in shopping malls.

These spaces, formerly occupied by retailers like Sears, J.C Penney, and Macy’s have often been repurposed.  We’ve seen them redeveloped as warehouses, medical offices, and even a high school. But here’s a new use that I hadn’t heard of until recently – casinos.

Earlier this year, Hollywood Casino took over a former Sears in the York Galleria Mall near Philadelphia. That was just nine months after Live Casino Pittsburgh debuted an old Bon-Ton department store at the Westmoreland Mall, outside Pittsburgh. Co-tenants of the mall in Pittsburgh have reported 40% sales to boost over 2019 since the casino opened in November 2020.

Although this is a bit unconventional, former department stores are actually great for casinos.  They typically have a lot of parking and easy access to and from the parking lot. There are several other department stores that are in the process of being converted to casinos, and Casino companies are spending a lot of money to redevelop these sites like Hard Rock International in Bristol, Virginia which they spent $400 million dollars to redevelop a former Belk department store into a casino resort and hotel.  Other future casinos are in the works at a former Macy’s near Penn State, a former Carson Pirie Scott in the Chicagoland area, and a former Bon-Ton department store in Newburgh, New York.

Amazon ramping up acquisitions and moving away from leasing


Amazon has contributed more than any other company to the growth in value of distribution facilities.  But in the past year, sources reveal that Amazon is shifting its strategy and now prefers to buy and develop its own facilities. As of the end of 2020, Amazon owned 8.4 million square feet of industrial space in North America.  In contrast, it leased 285 million square feet, more than 30 times as much space.

Amazon has spent at least $450M over the past year to buy industrial properties and development sites.  Sources expect that Amazon will continue to ramp up its buying activity.  These sources are several developers who have put together deals with Amazon, and have seen Amazon’s leasing activity decline in recent months, and have also seen Amazon back out of lease deals at the one-yard line in favor of purchasing their own sites.

This isn’t the first time that Amazon has decided to squeeze out business partners. Delivery services are another example. Last year, Amazon made the decision to cut ties with many local delivery firms, resulting in many of these companies shutting down and 1200 drivers losing their jobs. Amazon is huge, so anyone who does business with them really has to be aware of the risks of getting squeezed out.

Largest weekly US hotel demand gain in 6 weeks


Hospitality analytics firm STR’s latest report shows that revenue per available room for the week ending November 13 was the closest it has been to 2019 levels since August.  Much of this is due to strong weekday bookings, which typically represent business travelers.

The demand in hotels increased the most on Sundays and Mondays with strong improvements on Tuesdays and Thursdays. So, business travel is back on the rise and I’ll be one of those travelers this weekend and I head to Las Vegas.

Thank you for reading!  I’ll see you next time.

Connect with me here:

Mike Lin, CRE