Amazon is Killing the Retail Industry
Due to the explosion of e-commerce, driven largely by Amazon, the retail industry is under attack. While this headline is old news, it is still a major cause for concern for retail property managers. Retail rents are decreasing while vacancies are increasing. Consider these facts from a recent Costar Report:
- 60% increase in shopping centers with vacancy rates over 40% since 2016
- Class B and C mall rents are down 50% compared to the economic boom of 2005 to 2007
- Retail absorption declined 30% from 2016 to 2017 to 69 million square feet
- Fourth quarter retail investment fell to its lowest total ($20 billion) since 2014
While the economy boomed in 2017, retail continued its decline. The trend is not alarming, but should be a source of concern for retail property managers. Due to uncontrollable circumstances, the retail property industry is shrinking. Where does this leave retail property manager’s in terms of wage security?
Retail Property Manager Salaries
Retail property manager’s are very well compensated. In terms of the average property manager’s salary, they are near the top in terms of base salary and annual bonus. Despite negative industry sentiment, retail property manager salaries increased from 2016 to 2017:
Retail Property Manager Bonuses
While salaries grew from 2016 to 2017, so did retail property manager’s annual bonuses. The growth was moderate, increasing just 0.17% on average from 2016 to 2017. While this number is small, it becomes more tangible when combined with growing base salaries.
Retail Property Manager Salaries in 2018
Even though the retail industry is shrinking, retail property manager salaries and bonuses have seen growth from 2016 to 2017. While this does not make sense, it is likely the result of strong overall economic growth. Retail has continued to decline in 2018, but it remains to be seen if it will reverse the growth of retail property manager salaries.