How to reuse big-box-store infrastructure has become an issue for municipalities. As the country’s largest retailers either tumble or pull back from their brick-and-mortar strategies, there’s a belief that more of these properties will be left vacant.
“Consumer shopping habits are changing the physical retail landscape, and it’s starting to affect many community stakeholders,” says Eliot Kijewski, SIOR, senior vice president at Cushman & Wakefield/CRESCO Real Estate.
He says large retail properties are being abandoned for different concepts. That’s leaving communities with vacant 100,000-square-foot buildings, some of which are two stories, and they’re struggling to find buyers to take the space.
“Today, it’s about helping individual markets understand the possibilities abandoned big-box properties present,” he says. “And stakeholders are doing so by starting with the premise that it’s never going to be another big-box store again, and work from there.”
Smart Business spoke with Kijewski about how to deal with vacant big-box properties and who to engage in the process.
Where should the conversation about repurposing big-box properties start?
Developers are key to the entire process. There are so many businesses looking for land, but there isn’t much of it left to buy. Big-box properties, as opposed to vacant parcels, have assets such as paved concrete or asphalt parking lots, utility connections and lots of acreage.
Municipal governments should be part of the conversation early on to get a sense of what type of property could benefit the community. They may want to prioritize jobs over housing, or vice versa. With the direction of the municipality, a real estate team can engage with a developer and the process of adapting the vacant property into something that benefits all parties can begin.
What are the pluses of big-box properties?
Many of these former big-box sites are located near highways, which is desirable real estate for just about any commercial property. There’s a lot of potential when there’s a structure that’s in great condition and has highway exposure. That puts the new business in close proximity to a workforce or creates ease of access that makes a commute fairly easy. It just takes a developer with patience to convert such a location, but the upside is incredible.
What role do commercial realtors play in facilitating the reuse of big-box properties?
Commercial realtors serve as the connectors. They can connect municipalities, developers and the owners of the former big-box stores, then facilitate the conversation so that ultimately, the property can be converted from dormant to active.
Realtors have the benefit of a broader perspective and can be a resource of ideas for potential uses and what stakeholders can do to make it happen. In many cases, it’s a good first phone call to make.
Developers that are looking for properties to revitalize in this tightening real estate market can initiate that conversation, or it can come from the communities — mayors, council people, etc. — looking to finally do something with an empty property.
What should developers and municipalities discuss as they look to make a deal?
Municipalities are concerned primarily with job growth and loss, and how a change in the use of a property can affect the future. A municipality might not want to convert a former big-box plot into something that doesn’t add jobs to the local economy, so converting the building into self-storage might not have much appeal.
Communities benefit by being developer-friendly. It’s a good idea to instruct someone from economic development to be proactive about reaching out to find opportunities. Also, reach out to neighboring communities to discuss the successes they’ve had repurposing these properties to get ideas.
As the retail landscape continues to shift, it’s important that municipalities and developers keep an eye out for the opportunities vacant big-box stores create. People in the community are watching these changes as well. Lots of big, empty buildings give them the sense that their community is eroding. But if the infrastructure gets a face-lift and a new, inventive property takes its place, it turns blight into excitement.
Insights Real Estate is brought to you by Cushman & Wakefield/CRESCO Real Estate.