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Last month I was able to attend the Michigan Idea Exchange at the Cobo Center in Detroit. It is an annual event for the commercial real estate industry sponsored by the International Council of Shopping Centers. Highlights of the presentations this year included trends in the restaurant industry, retailers expanding in Michigan, developments in Detroit, East Lansing & Grand Rapids, Opportunity Zones and the effects of the legalization of Marihuana on the real estate industry. Since the event is sponsored by a retail trade group, many of the conversations revolve around new retail and restaurants that are coming to different locations in Michigan.
Retail expansions continue to focus on internet resistant businesses such as entertainment and fitness as well as expansions of large discount warehouse clubs, such as Costco and BJ’s Wholesale. Companies specializing in “experiential” businesses are having a great deal of success as they are not competing with on-line businesses and consumers are looking for more options to replace the traditional shopping trip to the mall. One area that has seen a great deal of success is the fitness category — where you see a variety of studios opening up everywhere. These include everything from the traditional gym to Pilates, yoga, resistance training and HIIT classes (high-intensity interval training). We have seen a number of new local studios open in Traverse City as well as national and regional fitness studios looking to expand in our state. Some of the studios eyeing various sites in Michigan include Orange Theory, Solidcore & AKT Fitness.
Another business that fits perfectly in the experiential entertainment world is Andretti Indoor Karting & Games who will also be expanding into Michigan. These entertainment mega-centers offer 2 indoor go-cart tracks that include up to 4 stories of elevation change. In addition to the featured go-cart course, they offer zip lines, ropes course, arcade games, Virtual Reality, 2-story laser tag and an interactive motion theater, all in an indoor venue which makes it perfect for year-round entertainment in Michigan.
While dining out continues to grow, so does ordering in and the largest changes in the restaurant industry are occurring in the delivery sector. With apps such as DoorDash, Uber Eats & GrubHub, restaurants are rethinking the way they position themselves for takeout and delivery and finding they need less on-site seating and a smaller footprint than they did a few years ago. They are also moving towards loyalty apps to track customers, make ordering easier and offer incentives to lure customers back.
Newer trends that are gaining in popularity include “clean” menus with healthy, natural options including vegan, chemical-free, gluten-free, keto-friendly and plant-based proteins, such as the impossible burger. Clean Juice is one such business looking to expand in Michigan. Restaurants are also trending towards eco-friendly packaging with less plastic and a push for paper cups and straws. Fast-casual restaurants are looking for spaces with easier ingress & egress, smaller store sizes and room for a drive-up or pick up window.
While the educational component of the event and trends in the industry were informative, the networking was the best reason to attend. In addition to networking opportunities at the conference, there was a meet and greet the evening before at a restaurant in downtown Detroit where I had a chance to talk to numerous real estate agents and developers who have done work in Traverse City in the past, are currently looking for sites in our area, or have said they would love to buy and develop in our area if they could find a project that met their search criteria. As real estate, the economy and tourism continue to be strong in our area, we will continue to see these groups pursuing new developments and businesses in northern Michigan.
– Dan Stiebel, CCIM
