Huge Retail Closings Coming in 2018; What To Do With The Empty Space
For years, brick and mortar retail stores have been closing in droves as companies like Amazon dominate the online market. With department stores like Sears, Macy’s, JCPenney all downsizing, that leaves big spaces in malls left open, and landlords wondering how to prevent their property from going under. That's a lot of vacant square footage.
According to Business Insider, more than 12,000 stores are likely to close in 2018. That’s up from 9,000 last year. Companies are expected to announce bankruptcy proceedings or store closings early this year. They do so after coming off the holiday shopping season when they're most flush.
Among the retailers most likely to file bankruptcy this year are Sears, Bon-Ton Stores, Bebe Stores, Destination Maternity Corp., and Stein Mart. Many will leave behind large spaces in malls and landlords with a huge drop in rental income.
The impending mall apocalypse is so bad that some mall companies have sued tenants who plan on closing down their stores, which can be done before they claim bankruptcy. Simon Property Group sued Starbucks after the coffee company planned to close 77 stores which were on Simon property. Bellevue Square in Seattle sued Whole Foods for breaking its lease.
In both cases, judges ruled for the landlords, and both chains were forced to reopen their stores.
But once those contracts end, what next? Something is fundamentally changing in our shopping landscape. What will happen to malls across America?
Well, according to Business Insider, alternative venues have begun popping up in spaces formerly occupied by big tenants like Sears or Macy’s.
In in 2011, Nashville Community College came in to Antioch, Tenn., and took over space abandoned in Hickory Hollow Mall. It’s now a satellite campus with 617,000 sq. ft. of retail space, a recreation center, classrooms, a library, and even an ice rink.
America’s oldest shopping mall in Providence, RI, closed down in 2008. In 2013, the Westminster Arcade reopened as a micro-apartment complex with 48 units averaging 300 sq. ft. each, along with restaurants, a coffee shop, and a hair salon.
In Oliver Springs, Tenn., the Tri-County Mall was renovated into space for Beech Park Baptist Church, which seats 800 people. The department store’s space was also renovated into classrooms for the church.
The changes may indicate a coming slowdown in new construction, but the reconstitution of existing square footage is not fear to change.
Not that far from me, two older malls and shopping plazas have been turned into mixed use developments, where people can walk just a few yards from their town homes or apartments to pick up groceries, run a quick errand, or grab a bite to eat.
As the market changes, we become creative when thinking about new ways to make good on past achievements, we aid in commerce and we offer new venues to communally interact.
What do you think is a good use for older spaces like large malls and plazas?