Big box retail is one of the country’s largest sectors of commercial real estate. However, over the past few years, the massive collection of stores has been slowly dwindling. Due to the ever-changing culture of global retail coupled with an increasingly digital-based consumer, the once bustling box stores are quickly becoming vacant.
However, it’s now becoming increasingly clear that these vacancies aren’t all so bad. This sudden shift in the industry means loads of opportunity opening up for CRE. Since the average big box store encompasses an area ranging from 50,000 to 200,000 square feet, millions of square feet are becoming available across the country.
With that being said, the real question is what fate lies ahead for these huge commercial properties? The possibilities are nearly endless, including dynamic repurposing, rebuilding, or even demolition. Let’s take a look at some of the options available for CRE’s transitioning big box sector.
These large empty plots are very promising for recreation and entertainment industries. With only minimal internal renovations, these vacant big-box structures can quickly be transformed into creative and fun destinations.
There are already scores of successful retrofitting projects where big box stores are transformed into havens for health and wellness. In New York, Gold’s Gym recently opened up a 53,000 square foot gym on the second story of a vacated Sears - and are looking to repeat this project in other locations. A three-story Life Time just inhabited an empty Sears Auto Center in Chicago which even features a glamorous rooftop pool.
It doesn’t end here - experts in the field are expecting more gyms to fill the voids.
Amazon recently announced that they are interested in utilizing vacated big-box properties to expand Whole Foods. The company is eager to open up new locations all over the county, and large empty spaces are perfect for the job.
According to Jim Sud, Executive Vice President of Growth and Business Development for Whole Foods, ‘We’re looking for the best locations we can find. So if that’s an existing center - second-generation space - that meets all of our criteria… we’ll jump all over it”.
Going beyond retail, medical centers are top competitors for these vacant box stores. In Gainesville, the UF Medical Center will be inhabiting one of these properties following a full-scale retrofit.
These new medical centers will feature everything from traditional health care to popular techniques including acupuncture, massage, and hydrotherapy.
However, not all box stores will be left standing. Many of them will be torn down and rebuilt into vital spaces for both living and working. Ofice and residential developers target these large properties due to their size, location, and amenities.
It’s evident that the closing of big box stores breeds a massive wave of opportunity for CRE around the country. What developments are you looking out for? For more information about today’s CRE trends, click here.