Hunton Retail Law Resource

Artificial intelligence (“AI”) is often touted as the latest transformative technology set to revolutionize the commercial real estate industry. This may seem like grandstanding, but the hype is real. AI is already being implemented by law firms and their clients to streamline business processes. AI, however, is ultimately a tool and whether tools make our lives easier or harder often depends on if we use them safely. This blog post examines some of the ways in which AI is used in commercial real estate and potential pitfalls with broad implementation.

Events such as the COVID-19 pandemic, extreme weather events and labor shortages have created significant supply chain challenges for retailers. In addition, the demand for more productive internet sales fulfillment centers has dramatically increased and will continue to increase for the foreseeable future. Many retailers were already in the process of converting to automation systems for supply chain facilities and internet fulfillment centers as a means to increase efficiency, productivity and revenue on a per square foot basis of logistics space, and the recent supply chain challenges have accelerated that process for many retailers. Automation includes equipment installations, automated vehicles, robotics and software products, and is designed to increase efficiency and productivity, reduce labor needs and operating expenses, and improve work place safety. Of course, there are many factors to consider for retailers converting to automated systems, including many real estate related considerations. This blog post focuses primarily on leasing issues, but retailers should also consider alternatives such as using or purchasing owned land or contracting with a 3PL service provider.

On July 22, 2020 Leaflink, a B2B cannabis marketplace, closed a $250 million senior secured credit facility with an undisclosed private lender. In the press release, Leaflink described the deal as “one of the largest debt financing deals completed in cannabis to date and…an important milestone for the industry.” When most people think of cannabis industry financing for retailers or operators, rather than debt financing, they think of sale-leasebacks with a cannabis real estate investment trust (REIT). Leaflink intends to use the money to provide supply chain financing options to its retailer clients through its new platform Leaflink Financial. This blog post gives a brief overview on why sale-leasebacks are ubiquitous and why debt financing is on the rise.

Most retailers have yet to fully embrace blockchain technology. Perhaps for good reason. Applying new technology, particularly that aimed at changing legacy systems, comes with certain risks. That being said, cryptocurrencies and blockchain have the potential to transform retail and commercial real estate. As previously shared by this blog, blockchain can be used to streamline inventory management, administer consumer loyalty programs and authenticate high-value assets or the supply chain, generally. Blockchain can also be used more simply to boost consumer sales or process tenant rent payments. Shifting away from the consumer end of retail, below are some novel ways blockchain technology, specifically tokenization, can modernize real estate acquisitions, dispositions and financing.

Ghost kitchens are one of the hottest trends in food. Ghost kitchens (also known as dark kitchens, cloud kitchens, and virtual restaurants, among a slew of other flashy names) are delivery-only restaurants found almost exclusively on food delivery apps like UberEats and Grubhub. Rather than storefronts with dining areas, they usually operate out of existing restaurants, commissary kitchens or food trucks.