Though the real estate industry remains extremely competitive, complexity and extensive due diligence contribute to one-fourth of retailer respondents (24%) taking more than six months to sign a contract once a site has been approved. On average, retailers said they screen ten potential sites for each one that is approved. About one-third (36%) of stores are owned while the remainder (64%) are leased.
After a contract is signed, retailers said it takes an average of three to six months if the store is part of a remodel or new construction.
A ground-up project often takes more than twice as long with the majority of retailers acknowledging that those projects often take more than twelve months.
While many factors contribute to duration of construction, there is no denying the risk associated with not opening a site on time and on budget.
Because of the complexity of the real estate lifecycle, many retailers are shifting from homegrown software applications and simple desktop programs like Microsoft Excel to specific technologies that help them manage the process.
According to the survey, the sale of software that manages real estate has experienced double-digit growth this year and nearly half of retailers (42%) now use these applications.
“Retailers dedicate a tremendous amount of resources to identify, and ultimately operate, their stores in prime locations,” said Rob Garf, Vice President and General Manager of Retail Strategies at AMR Research Inc.
“As retailers are faced with increasingly complex accounting procedures, competitive environments, and nationwide store management, they are turning to software as a solution to help them manage each stage of the real estate process more efficiently.”
The 2007 NRF Retail Real Estate study will be released in its entirety at NRF's Annual Convention , January 13-16, 2008 in New York City.
AMR Research is the No. 1 advisory firm focused on supply chain, enterprise applications, and infrastructure. Founded in 1986, AMR Research provides advisory services and peer networking opportunities to supply chain and technology professionals in the manufacturing and retail sectors.
National Retail Federation
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