Finding and retaining talent and identifying affordable space are among the top challenges the retail sector will face in the coming year, according to experts who participated in the Business Record’s recent Project515 conversation that focused on retail.

The Business Record held the first of its 2024 Project515 series on May 30. The virtual discussion looked at challenges and opportunities facing the retail sector and possible strategies to address them.

Here are key takeaways from what these experts had to say. Their responses have been lightly edited for clarity and brevity.

To listen to the conversation in its entirety, go here.

The next installment in the Project515 series is scheduled for Aug. 15, where we will listen to experts discuss the office environment. The Project515 conversation on housing is scheduled for Dec. 5. Watch for information on how to register here.

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Lisa Bates

Assistant director, community development specialist, Iowa Retail Initiative through Iowa State University Extension and Outreach

Challenges and opportunities retail is facing

It doesn’t matter what size the community you’re in, there’s some of the same issues. Looking for a qualified workforce that will stick with you, making sure they have the proper training. This is a community-based issue; we need to not only tackle retail and its specific issues but looking holistically at it. Issues like housing and affordability of your housing. Making sure retailers have connections in your communities to find spaces. Making sure if they want to grow, they have connections to make sure that environment is available to them. It’s a lot about relationships and making those key relationships within a community of any size to not only understand existing retailers and what their needs are, but also looking at who are those new, upcoming entrepreneurs who may be entering your space as well.

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Jennifer Brown

Economic development director, city of Waukee

Supporting a growing workforce

For the city of Waukee, retail is booming. We have a lot of new growth and we expect that to continue. But retail and the service sector account for the largest number of employees in Waukee, and we expect that to grow and certainly we know that those employers that continue to add new employees will need to attract from outside our community. So we know there is a conversation that will need to be had about public transportation. That is something we have already started, but we know that may be a challenge. We also know the wages aren’t quite such that people can live in the home they want to live and have affordable housing, so that conversation needs to continue within our community, and that’s anywhere not just the city of Waukee, but we want to make sure if residents want to live and work in Waukee they have that opportunity so we know that’s a big mountain to climb. Those are big conversation topics that we’re continuing to talk about.

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Mindy Bergstrom

Owner, Cooks’ Emporium, Nook & Nest and Z.W. Mercantile

Maintaining the forward momentum that retail has been experiencing

I think 2020 was a great way for everyone to realize how important shopping local is, and I think that’s what needs to continue to happen. And just getting out, not even to buy something, but to get out and enjoy the spaces and offerings of a community. I think there’s other growth areas we can tap into in Ames to get people to stay for more than just a day. There’s a lot of opportunities we haven’t tapped into in Ames. And if we could get more space, more buildings, that would provide more opportunities for more independent retailers to open up shop. Finding space was definitely a challenge. Also, always trying to plan ahead. The original space we looked at in the District at Prairie Trail was a smaller space and thinking ahead, what happens if we do well and want to expand? Then we have to spend all that money again for signage and fixtures to move to another location, so we ended up going into a location that was larger than we hoped for but we did it because we hoped for that growth.

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Bill Wright

Senior vice president, CBRE

On available retail space

From an absorption standpoint, there is more space being absorbed, vacancy is very low. There is not a lot of new construction going on in the market. Certainly in Waukee, Ankeny and the Jordan Creek sub-corridors, we’re seeing some construction going on but in relative terms, there is very little new construction going on out there. So what’s happening is the available space that had been considered a B or C location, it’s getting absorbed because there is still a need for businesses to grow. It may not be as strong as we’d like, but there’s still a need to find new locations. So we’re seeing that quite a bit. That the B or C space is filling up. As a result, we have positive absorption. We have very low vacancies. In the Des Moines market, we’re under 5%. Nationally, we’re under 5%. That is historically low, nationally and locally. New construction is expensive. Land is expensive. Covenants that cities place on a retail developer are heavy and often expensive to build. And there are fewer retailers today to lease space. We’re in a market where interest rates are higher than they were, so I don’t think you’re going to see a lot of speculative new construction. I think the new construction in Des Moines will be centered around build-to-suit type projects.