Archive for the ‘Big Box’ Category
Friday, April 26th, 2013
Retail owners and operators are continuing to look towards entertainment and restaurant tenants to fill spaces left vacant by failing traditional retailers. According to the National Real Estate Investor, the logic behind this is that while traditional retailers may be taken out by the Amazon’s of the world, movie theaters and restaurants are more immune to online competition because they offer an experience that can’t be duplicated online.
While these non-traditional retailers offer more protection from online competitors, landlords should not expect a miraculous recovery. Non-traditional retail is simply not expanding enough to fill the holes of struggling retail centers, and even so, would not move to centers that are beyond saving. It appears that at best, a safe, non-traditional retail tenant can make a mediocre property stronger, and a good property great.
To read the full article from the National Real Estate Investor, click here.
Posted in Big Box, Economy, Malls, Real Property, Retail, Store Chains, Strip Centers | No Comments »
Tuesday, July 31st, 2012
After decades of amassing ever-more square footage under roof, big box retailers are evolving in a new direction of getting smaller. According to Time Magazine, many big box retailers are realizing that the enormous, one-size-fits-all approach doesn’t work for all shoppers and locations. Many retailers are beginning to shrink into smaller stores, sometimes with smaller, more intimate and approachable locations within larger stores.
Industry leaders like Target and Wal-Mart are leading the way by introducing these smaller store-in-store specialty shops as well as smaller versions of their own stores in more urban locations. Target reportedly already has a deal with Apple Inc. to put several of their Apple Stores inside Target locations. In addition, they are also rolling out CityTarget stores in urban areas that are two-thirds the size of their regular stores. Wal-Mart is also beginning to put up Neighborhood Market stores in urban Southern California markets.
To read the full article from Time Magazine, click here.
Posted in Big Box, Economy, Real Property, Retail | No Comments »
Monday, April 2nd, 2012
The Denver, Colorado commercial real estate market continued improving over the first quarter as the office, retail, and industrial sectors all absorbed more space than was left vacant. According to the Denver Business Journal, the office sector led the way with 285,000 square feet of positive absorption in the first quarter and a drop in vacancy from 19.3% to 17.9%. This solid absorption is expected to continue throughout the remainder of 2012.
The retail sector also showed significant absorption of 108,000 square feet in the first quarter and a year-over-year vacancy improvement from 9.3% to 8.9%. A lot of success can be attributed to a large number of Big Box stores in the area being filled by discounters and entertainment tenants over the last few months. The third sector, industrial, absorbed 278,000 square feet in the first quarter and had a slight vacancy drop year-over year from 8.45% to 8.34%.
To read the full article from the Denver Business Journal, click here.
Posted in Big Box, Industrial, Office, Real Property, Retail, Western | No Comments »
Monday, March 12th, 2012
Build-to-suit properties occur when a retailer, unconcerned with resale value, develops a building to suit their needs in order to meet the same design as their other properties nationwide. Rather than simply redeveloping existing buildings, these retailers are willing to pay well over market value to develop the type of layout they want. According to RE Business Online, in a typical build-to-suit, a developer assembles land to acquire the desired site, demolishes existing structures and constructs a building that conforms to the national prototype store design of the ultimate lessee.
These buildings bring a difficult scenario for assessors, as the premium paid for many properties can be anywhere from 25 – 50% higher than it would fetch on the open market. If property taxes are supposed to be based on a properties market value, or the price a willing buyer is open to pay in an open market, buildings that are developed at a higher than market value tend to be over-assessed and thus end up paying more in property taxes.
To read the full article from RE Business Online, click here.
Posted in Big Box, Economy, Real Property, Retail, Store Chains | No Comments »
Wednesday, November 23rd, 2011
The retail industry was one of the more favored targets for lending in the third quarter as banks and life insurance companies increased their efforts towards commercial properties. According to Retail Traffic, loan organizations for retail properties increased 37% between the second and third quarters in 2011, and the average loan size on retail assets also went up to $20.9 million from $15 million in the first quarter.
The increase in lending for retail points to the fact that traditional lenders still have an appetite for retail properties, but prefer that they feature good credit anchor tenants, long-term leases, and good locations. Life insurance companies are the most picky when it comes to location as they will only lend to properties featured in the top 50 markets in the country. Where life insurance companies accounted for 26% of all originations for commercial property in Washington DC and 14% in Manhattan, they only accounted for no more than 10% in tertiary cities across the country.
To read the full article from Retail Traffic, click here.
Posted in Big Box, Eastern, Malls, Real Property, Retail, Store Chains, Strip Centers | No Comments »
Wednesday, November 9th, 2011
Despite the turnarounds achieved by other commercial real estate sectors, retail has yet to have shown any consistent signs of recovery. No matter the type of retail, whether it is strip centers, regional malls or power centers, vacancies have risen to and remained at levels unseen in at least a decade. According to the National Real Estate Investor, retail rent growth has remained close to zero or mildly negative, knocking back rents to levels last observed three to four years ago.
The reasoning behind the current state and why retail is unable to climb out of it is two-fold. First off, overall demand remains weak, with economic growth and job creation being relatively at a standstill. While sales trends have increased slightly over the last couple months, it is not enough to create greater demand for vacant space. Second, the overwhelming supply of retail properties is weighing down the sector like none other. Inventory growth in the early to mid 2000′s led to new retail construction that today is not necessary.
To read the full article from the National Real Estate Investor, click here.
Posted in Big Box, Economy, Malls, Real Property, Retail, Store Chains, Strip Centers | No Comments »
Tuesday, July 19th, 2011
With the announcement by Borders that they have asked a bankruptcy judge to let it cease operations and liquidate its remaining 399 locations, the real estate implications it will cause are coming to the forefront. According to businessjournalism.org, with an already grim looking national retail real estate landscape from empty hulks of default chains like circuit city, as well as closed car dealerships and selectively shuttered locations of still-going concerns like Kmart, the addition of these 45,000 square-foot behemoths won’t bode well for local real estate markets across the country.
The sheer size of the locations will make them very hard to re-lease, especially with recent reports of healthy retailers downsizing their floorplans for a more express version of their stores. Nearby landlords of malls and shopping centers, who are already reporting rising vacancy space, will start to feel a ripple effect of tenants losing business because of the decreased foot-traffic caused by the liquidation of the anchor-chain.
To read the full article from businessjournalism.org, click here.
Posted in Big Box, Economy, Real Property, Retail, Store Chains | No Comments »
Thursday, June 30th, 2011
Best Buy is looking to reduce its 42 million square foot big box footprint by 10% over the next three to five years due to weak sales caused by stretched consumers and competition from discounters and internet rivals. According to the National Real Estate Investor, the consolidation could save the company $70 to $80 million a year. The retailer is also considering subleasing space in existing stores as one way to achieve the reduction.
Sales and earnings for the electronic retail giant were relatively flat in the first quarter of 2011 compared with the first quarter of 2010. Comparable store sales dropped 1.7% in the first fiscal quarter on a year-over-year basis after growing 2.8% during the same period last year. Ever-present economic hardships such as falling home values and rising gas and food prices is accelerating the online buying trend, the largest threat to sales for the brick and mortar segment of the retailer.
To read the full article from the National Real Estate Investor, click here.
Posted in Big Box, Economy, Real Property, Retail | No Comments »
Friday, April 22nd, 2011
As other retail sectors struggle with high vacancy rates, regional mall owners are looking to take advantage by picking off tenants who traditionally have occupied freestanding stores or shopping centers. As this trend grows, regional malls will strengthen their status as retail mainstays. The time is right for these traditional freestanding retailers to move into malls due to a combination of market forces, including available space, desire to shrink square footage, and the large amount of 10- and 15- year leases signed in the mid to late 1990′s coming to an end.
Regional mall owners see the acquisition of these new tenants as a two-fold opportunity. Many regional malls are having a hard time filling holes left over by failed department store anchors, something that these new tenants, who are seeking tens of thousands of square feet, can help fill up quickly. More importantly, the bringing in of stores normally associated with other retail formats helps regional malls regain their footing as the dominant shopping destination in their trade area.
To read the full article from Retail Traffic, click here.
Posted in Big Box, Malls, Real Property, Retail, Store Chains, Strip Centers | No Comments »
Friday, April 1st, 2011
Many U.S. big-box chains are starting to shrink average store sizes to reflect the growing importance of multi-channel shopping, adapt to urban settings and recognize the need to optimize portfolios. According to Retail Traffic, the smaller store formats allow retailers to maximize profitability and open more stores in closer proximity to each other. Wal-Mart Stores alone plans to open between 30 and 40 smaller format stores in 2011.
These smaller stores might not translate into lower real estate costs as the major markets that many retailers are targeting for these concepts have sky-high rents per square foot that will likely minimize any savings on overall real estate costs. A smaller specialty retailer may be able to save on common area maintenance, but big box anchor tenants pay rents based on a percentage of sales and would not realize significant savings for smaller stores in large cities.
To read the full article from Retail Traffic, click here.
Posted in Big Box, Real Property, Retail | No Comments »
