I'd like to ask you, Tom Londres, What is the BIGGEST RISK?
Well, you know, I'd have to take a position to establish a vantage point on answering that. Am I a retailer looking into the future saying where's my biggest risk? Am I an investor or an owner of a piece of retail real estate looking to position it, um, to minimize my risk or assess where am I most exposed going forward? So I'll take the latter. I'll tell you, I'll, I'll give you what I think is the biggest risk or one of the big risks if you owned retail real estate.
I'm not going to get into the mind of a retailer where they think they should be other than I think they should be always in the online world and the bricks and mortar world. That, that is universally agreed if you're a retailer and want to move forward with some exceptions, but if you want to, generally speaking, if you want to be a vibrant, relevant retailer moving forward, you have to have an online and a bricks and mortar presence that's effortless, that has a great customer experience.
And we can see that with both of those retailers that are disciplined in each one of those corners trying to get, um, into the other space.
But I would say if you own retail real estate and you have an exposure, um, high exposure to department stores and apparel retailers, I would say if your portfolio contains a large portion, the percentage of your occupancy, um, is coming from department stores or apparel retailers. I would say you need to rethink when those options come up.
If you have the opportunities to downsize to mitigate your risks, you have to inject, entertainment, you have to inject food, you have to inject convenience, services. Fitness, theater. And again, moving towards diversifying your center, not away from retail, to diversify and add apartments. Although some assets would lean towards that just in scale and size you need mitigate and say, I'll take one wing of retail and make them apartments or luxury condos or townhouses.
Maybe I'll add a hotel or something, but generally speaking, if you look at your portfolio, if you're owner of a retail real estate and you're leaning more towards a department store and or apparel, I'd say probably rethink it. Because I think apparel is shrinking, uh, in its category and its demand and its consumption. And I think department stores, most of them, if not all of them, will be radically different or completely eliminated within a decade.