- Ryan O.
It might be a while until we return to normalcy. Social distancing could be required everywhere we go. This could be problematic for restaurants. Everyone knows it's nearly impossible to make a living in the food industry because profit margins can be razor thin.
If restaurants cannot max their dine in capacity, I wonder if restaurants will pivot towards takeout. This also means being tied into the gig economy with third party vendors like Uber Eats and Bite Squad. If that's the case, restaurant owners might require less square footage to operate. For restaurants that continue to focus on dine in service, they'll have the same square footage, but less seats. Could dine in service come at a premium price?
I'm a foodie and my go-to area is Kaimuki. If COVID-19 changes how we view restaurants, I wonder how these spaces will be re-purposed.
The gig economy is suffering too. However, it was reported that InstaCart turned a profit in April. I wonder what InstaCart is going to use with the money. I can imagine that they have a lot of data on what their customers have been ordering.
For example, let's say InstaCart saw that Hawaii shoppers were ordering a lot kakimochi. What would happen if InstaCart decided to buy a warehouse to stock out on kakimochi and other products that shoppers have been order? If this farfetched idea does happen, it could stimulate the real estate industry.
Could this be the last of big box retail? I hope not. I worked at Macy's during college and I can't imagine it not being around. Plus, Macy's my go-to store to buy all my clothes.
My office is near Ala Moana Shopping Center. When I had to swing by to get a few documents, I noticed the mall was a ghost town. As people were staying at home, I wondered how many tenants were able to make their lease payments to the landlord. This can be a never-ending domino effect if the tenant defaults.
If COVID-19 shifts retail to the likes of Amazon, what will happen to our malls? Ala Moana Shopping Center is the prime example. If Macy's moves out, I could see another (luxury) condo being built in that space.
An article by Forbes written in 2017 proposed that shopping centers should repurpose to residential. According to a report cited by Forbes, upwards of 275 shopping centers would close by 2020.
There's always been a demand for housing in Hawaii. If retail cannot recover, would we see malls being repurposed to accommodate residential housing? This could re-highlight the idea of mix-use development.
Stay safe and healthy. We are in it together. Let's keep flattening the curve.
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