Big box stores have been hard hit as online shopping has gained in popularity. This trend has only been exacerbated by the pandemic – and many businesses have been forced to shutter.
Whether it’s a standalone store like Kmart, or an anchor store at a shopping mall – like J.C. Penney – you’ve probably noticed more and more big box store closings happening recently. Many real estate developers are investing in big box properties like these and reinventing how the space is used – creating real benefits for property owners and businesses alike.
A new take on an old space
While the large department store business model may no longer be especially viable, there are other types of businesses that still work well in such spaces. For instance, some developers have begun converting the former anchor stores at shopping centers into supermarkets. This tends to increase foot traffic in the area – especially since malls are often located in predominantly residential areas – and supports surrounding brick and mortar businesses as well.
Other developers have taken to slicing up big box spaces into several smaller retail outlets. This is advantageous for landlords, as they can charge a higher rate per square foot for smaller spaces.
A complex process
To the casual onlooker, it may seem as though there is little demand to buy up big box stores. Such properties may lie vacant for months or even years – creating the impression that the space is undesirable. This, however, is not the case.
There is a lot that goes into repurposing a big box store into a grocery store, gym or even a mix of businesses. There are negotiations, letters of intent, leases and construction permits to handle. All of this requires time and a comprehensive understanding of the legal processes involved. Working with an attorney experienced in commercial real estate can be an invaluable asset in this undertaking.