Investors are keeping a keen eye on trends for millennials, a growing population often viewed as ultra-cool that is becoming a significant consumer group. Cushman & Wakefield stresses the importance of looking beyond malls, high streets and main streets to Cool streets: Explore the hottest urban retail markets across North America in its 2016 inaugural report:
“If retailers live and die by cool, the same also holds true of retail properties, shopping centers and entire neighborhoods. Whenever we speak about real estate, the issue of location and a number of other factors come into play, but the reality is that cool matters. In an age of frugal consumers, e-commerce encroachment, and vast gaps in performance between trophy malls and Class B and C centers, cool matters now more than ever.”
While a neighborhood’s urban renewal process often took decades to achieve, now “troubled” neighborhoods can reach “prime hipness” within a few years, and then move from “prime hipness” to “gone mainstream” even more quickly.
For example, the report suggests Brooklyn’s Williamsburg neighborhood could be considered the poster child for the cool streets movement. Once in decay in the 1990s and seemingly a world away from the prestige of Manhattan, an influx of “creatives, artists, musicians, hipsters and the LGBT community” began taking a chance on the “edgy,” at best, Williamsburg neighborhood starting about 1999, after being priced out of Manhattan’s residential market.
“They brought with them a counterculture philosophy that infused Williamsburg’s commercial corridors. New bars, music venues, art galleries and boutiques catering to their tastes sprang up in the area. The cool street cycle was set in motion, and Williamsburg’s appeal grew — as did its rents. Within just a few years, residential rents in Williamsburg were on par with top Manhattan apartment rates. National chain retailers engaged in bidding wars over prime corner shop space while quirky independents were priced out.”
In evaluating the top 100 cool streets of North America, the report sports a “Hip-O-Meter” for at-a-glace viewing of where neighborhoods are in the cool street cycle: edgy/cool; up and coming; prime hipness; still cool, but going mainstream; and gone mainstream. Also examined are: livability and retail flavor, residential rents, retail rents and demographics.
If you want your finger on the pulse on what’s likely to be hot in retail in the future, look no further than the “incubator” of cool streets, states the report.
The views, statements and opinions expressed in this article are those of the author and are not necessarily those of Institutional Real Estate, Inc.
Not a subscriber to IREI Insights blog? Sign up to receive alerts on new blog posts.
Jennifer Molloy is senior editor of Institutional Real Estate Asia Pacific.
