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Breathing New Life into Retail’s Vacant Anchor Space
The retail sector continues to face perhaps its biggest challenge as 324 anchors are expected to close in 2017, turning about 36 million square feet of retail space vacant. JLL Retail’s latest report, “Empty to Alive: The Next Use for Department Store Space,” shared how some mall owners have already transformed anchor space, as well as what’s ahead for the sector.
While the number of store closure announcements is lower than during the recession, the amount of retail space being closed is higher. The changes are being driven by shifting consumer tastes, especially Millennials whose prominence and buying power is increasing; the penetration by E-commerce, though it is not growing as much as some feared; and consumers are seeking experiences and value.
Among the key findings of JLL’s report include:
-Sertitage re-leased former Sears and Kmart space at 4.4 times the previous rental rate
-GGP found a second life for nearly 50 former department store anchors in their portfolio
-Food & Beverage, grocery and entertainment can be the right replacement for empty storefronts
-Dollar stores, auto parts and beauty retailers continue aggressive expansion
-Apparel, shoes and office are top sectors consolidating
-More than half of store closures that JLL tracks were due to bankruptcies
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