19 Apr 2019
This past Tuesday, I read an article in Shopping Center Business identifying creative opportunities for landlords to fill vacancies for medium and large retail big box stores. As an industry, it is becoming more common to seek out opportunities such as these.
The article, written by Alex Tostado, points out that the retail landscape looks very different than it did just a few short years ago. One of the most striking changes is the large number of medium and large boxes now standing empty.
Not all vacant retail store fronts fit the bill for a self storage facility. In fact, many of these vacant store fronts are leased, further limiting the type of operator. Tostado does reference self storage as an opportunity though and offers some interesting points.
The list of non-traditional concepts filling vacant big box spaces includes everything from indoor climbing centers and discount fitness concepts, to self storage centers.
In the article, Tostado explains that when an Eastern Mountain Sports vacates a 15,000-square-foot space in Newton, Massachusetts — to use a recent real-world example — the list of potential brands and businesses to backfill that space is not long.
Since the early 2000's, self storage has shifted into a retail business (location).
It is also important to note that it’s generally much more difficult to fill spaces left vacant by traditional large department store anchors.
Challenges presented by the physical spaces themselves cannot be discounted, either. From ceiling heights to buildout requirements, the large size and specific dimensions of larger boxes can make renovations costly — or even cost-prohibitive.
This is exactly why StorQuest (self storage ) was able to benefit from the Kmart site.
In closing, Tostado says that the bottom line, however, is that this active and frankly fascinating commercial real estate sector is only going to continue to become more relevant in the months and years ahead. There are more big-box closures on the way, and the turbulence of a rapidly evolving industry will continue to present plenty of opportunities for backfilling those spaces with new concepts and creativity.
My takeaway from Tostado's article is that as an industry, we are certainly presented with new and creative opportunities to develop. However, we also need to be cognisant of supply/demand. If we're not careful in how we plan for new development, our industry may find itself in a similar situation.
