Commercial real estate has seen its fair-share of changes in the Baton Rouge area in the last year. With consumer trends pushing for e-commerce-based amenities and convenience, the average brick-and-mortar retailer continues to be affected. Just in the last year, large retail stores have been cutting back commercial real estate space all over the country, including those in Baton Rouge. What does this mean for commercial real estate space in Baton Rouge?
Local real estate brokers were asked their opinion about the rapid decline in demand for commercial real estate space. Called the 'Amazon effect,' brick-and-mortar retailers all over Baton Rouge are having a hard time competing for business as their customers have been utilizing e-commerce means to get their goods. Four of the Kohl's stores in Louisiana have reported that they will downsize by 25,000 square feet. The Macy's store in the Mall of Louisiana plans to turn 16,000 square feet into a discount outlet.
Cortana Mall has also seen a decline in the demand for its commercial real estate space. The Cortana Mall, which contains one million square feet, is for sale. Downsizing, repurposed space and online distribution are and will continue to be trends for retailers, according to local real estate experts.
However, there have been some bright moments in this rapidly changing market. It's allowed smaller businesses to afford and utilize retail space formerly owned by big national brands. Commercial real estate vacancy rates in the area are on par with national averages. However, experts are saying it's only going to continue to 'get worse' for commercial property owners in the demand for space. The 'Amazon effect' will continue to shape commercial real estate trends in Baton Rouge and around the country.
Source: businessreport.com, "New realities for commercial retail space in Baton Rouge," Stephanie Riegel, April 11, 2018