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Big Box Retail Report Challenges Assumptions
A considerable amount of big box space was brought to the San Diego market in the first half of 2018, with nearly 100,000 square feet of that due to the bankruptcy of Toys R Us. New research by CBRE also notes, there are several additional Toys R Us locations in the county that are expected to come online as they go through the final phases of bankruptcy.
The good news is there has been movement on some of these spaces already, mitigating the fear that they would sit vacant.
CBRE’s mid-year Big Box report notes there are 26 vacant big box retail spaces totaling a bit more than one million square feet in San Diego. The submarket with the largest amount of big box vacancy was Central San Diego (452,494 square feet), followed by South San Diego (361,661 square feet). The properties with the largest inventory of vacant big box space include Westfield UTC (190,000 square feet former Sears and 121,872 square feet former Nordstrom) and San Ysidro Village (98,194 square feet former K-Mart).
Off-price or discount or value retailers, led by Dollar General and TJ Maxx, are experiencing growth and plan on expanding into more than 40 million square feet nationwide, according to CBRE Research, company filings and eMarketer. With such expansions targeting traditional big box vacancies, these players may ultimately lessen the e-commerce impact moving forward.
A surge in development of big box spaces, specifically in lower-priced residential submarkets, challenges the assumption that ground-up retailers are a thing of the past, especially when it comes to discount retailers, writes CBRE.
For comments, questions or concerns, please contact Dennis Kaiser
