Interview by John Rufo

Form + Place recently sat down with Adam Conviser of CPG to get his take on the retail/commercial space market and current trends as we dive into 2021. Adam’s cross-disciplinary take on landlord and tenant representation, development, and management of commercial space lends a perspective that looks beyond design but also points to clear effects and impacts on the future of our cities and towns.

Adam, thanks for joining us. I’ve heard you use the term “Huburbs” on a few calls recently. Explain what it is and what’s happening there.

Let me first say that because Boston is referred to as the HUB, and although we do work in the city, a great majority of our practice falls in the suburbs of the HUB, so we have affectionately referred to this trade area as the "HUBURBS". I think this term has legs...

We are seeing a pick-up in activity across the board. I would say up until August it was crickets. Now the phone is ringing, tenants are chasing space, more workouts for deferred rent have been finalized, reduced rent and new deal structures have been made, and tenants are using this time to remodel and extend term - such as Yoki at Station Landing in Medford, for example.

What specific activity do you see?

We are seeing restaurants getting creative. Winter has eliminated outdoor seating, although we have seen some igloos at Patriot Place and Tavern in the Square in Burlington, along with “Heated Tent” at Dunn-Gaherin's in Newton. Lookout Farms in Natick has created a whimsical strung-light dining experience, with picnic tables inside a converted greenhouse. The tables have heaters and are spread out and it’s nice to just be with people. My family enjoyed a fun dinner out a couple of weeks ago and it felt safe and was a needed change of scenery.

Some openings include Cacao Chocolatier and cafe in Newton Highlands (killer hot chocolate!), Lacon Paris Patisserie in Newton Highlands (solid espresso and macaroons), Tous le Jours, a bakery/cafe will be occupying the former Murray's Liquors in Newton Center. PEX fitness in Needham, despite the reduced capacity, has kept it safe and has thrived during a challenging time, offering people the ability to stay in shape physically and mentally. Hats off to proprietor Michael Campanella and his team. Bianca's restaurant (sushi, pizza, rotisserie chicken) in Chestnut Hill at The Street opened, as did Sushico (former owners of Central) in Newton Center. In Brookline's Coolidge Corner, Novel Kitchen opened as part of the iconic Brookline Booksmith (taking over the Verizon space), offering light fare/drinks in a bookstore setting. Tatte Bakery at 420 Harvard Street, steps from Coolidge Corner, also seems rather busy. Unfortunately, across the street, one of my favorite coffee shops, 4A Coffee, will be closing in February. Restaurants have pivoted to provide touchless transactions, switching up menus, traveling and executing pop-ups (leveraging social media for announcements, buzz, and viral word of mouth). Sorry for using the word “viral”.

What emerging concepts do you think will stick as we transition through the Pandemic and beyond?

The parklets and expanded seating areas that restaurants have employed have been a lifesaver but, as we look to the future in a post-Pandemic world, these parklets should take on a more permanent place in our downtowns and become more refined in their design and deployment. They activate the streetscapes in our downtown and allow for increased social interaction and, in some instances, look really good. I think closing streets (diverting traffic) and reclaiming parking spaces should all be studied by our cities and towns. Restaurants that continue to provide outdoor space will in turn increase street activation and foot-traffic, thereby attracting some “not-food merchants”, who will further increase activity.

Wow! You know it’s a New Day when you hear retail leasing specialists advocating for parking spaces being devoted to other uses! Who is winning out there?

Suburban kitchens that can accommodate a drive-thru or pick-up window - Soup Factory in Newton on Needham Street has a pick-up window and it’s busy (I can attest). Chipotle is growing and adding the "Chipotlane" Drive-Thru. Mamaleh's Deli in Cambridge has deployed suburban pop-ups that seem to be doing really well, with the help of social media. The same can be said for Flour Bakery with their pop-up in Chestnut Hill. Tatte Bakery in the suburbs, with their expanded dinner menu, seems to be a perfect fit in the suburban Pandemic world. These are all winners. That said, restaurants make their money on alcohol and this is tough to do in a take-home model. A great many restaurants will be a casualty of the Pandemic and will not come back. I will be curious to see what happens to Blue on Highland, which has been closed for the entire Pandemic.

Drive-thru in Warwick, RI (Form + Place project)

What do you think of the staying power of the BUY ONLINE PICK UP IN STORE (BOPIS) trend?

Speaking with a friend, who is an investor through a hedge fund in retail, the discussions with CEOs on earnings calls all reveal the same thing - customers picking up merchandise inside a store is profitable, and e-commerce often is not. The Wall Street Journal had an article about how retailers are telling customers to keep merchandise they planned to return. This would seem to confirm just how lousy the e-commerce margins are, which is further corroborated by Amazon's own disclosure about losing money in e-commerce. The talk is that stores are trying to figure out new store deployment strategies to reduce e-commerce shipping and make pick-ups using BOPIS appear to be a more convenient option for customers. This will also generate additional sales, simply by having a customer physically enter a store. There is also a lot of talk about "last mile" delivery or micro-fulfillment. Stores essentially become mini warehouse/distribution hubs. Some grocery stores are talking about closing some units for retail and using them as micro-fulfillment centers.

With so many people focused on brands that they can get behind socially and from a value standpoint, what do you see in the Direct to Consumer (DTC) space?

Direct to Consumer brands had record sales during the Pandemic, but it’s a hard way to make a profit. It will be interesting to see who figures out the balance between DTC and brick and mortar. The post-Pandemic landscape will provide an opportunity for some DTC brands to establish themselves as the leaders. The acquisition of customers and fulfillment are hurdles to DTC brands (Chewey, Casper, Bonobos, Glossier, Hims, Rent the Runway, Stitch Fix, Warby Parker).

How did holiday sales look?

It depends on the category, as Target was above projection, but in general the holiday was more robust than expected.

Total retail sales grew 3% over the extended 75-day holiday period, versus a forecast of 2.4%, according to Mastercard SpendingPulse, which tracks online and in-store retail sales across all payment methods. The number is far better than the 3.5% drop recorded during 2008, the last U.S. recession. (Bloomberg)

Needham Streetscape Intentionally Reclaimed

Stepping back to the big takeaways, what is the new "main on main" post-Pandemic?

THE SUBURBS/HUBURBS SUPERPOWER: Post-Pandemic the workforce will not be the same in the city. We know this. Everyone is talking about how the Pandemic has made people realize that working from home has its perks in the work-life balance scale. That said, some of us need to be in our offices for collaboration, teamwork, and some jobs just can't be duplicated at home. So, what does the new model look like? I have heard from many discussions that companies will have modified work weeks, with employees perhaps going into the office 2 or 3 days and working the balance from home. While this strengthens the daytime population in the suburbs, it also means that our merchants will benefit. Stores and restaurants will have to figure out how the dust settles, but we are already seeing a push from merchants and restaurants looking for suburban street fronts to accommodate a change in traffic patterns. Additionally, a lot of offices are deciding to move from the city to the suburbs to be closer to their workforce, and to provide more space. This will further emphasize this change. We will be leaning on AI, location intelligence merging cellular data and customer profiling tools to tell us what is happening in real-time on the street. This data will be essential in redefining what our new trade areas look like, and these numbers will dictate what it means to be "main on main". I think the new HUB, or HUBs, will be the HUBURBS.

Perspectives

Q & A with Adam Conviser: The State of Retail in the Boston Suburbs

Form + Place

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