Well-publicized retail bankruptcies and store closures marked the first half of 2023, with Tuesday Morning, Party City and Bed Bath & Beyond locations closing up shop. Though this generated negative press, it has opened up opportunities for other takers to fill the available space.
The well-located spaces are attractive to retailers like TJ Maxx, Marshall’s HomeGoods and fitness centers such as Planet Fitness or Crunch Fitness. Grocery stores are also taking advantage of these empty spaces by adding additional stores in existing markets or entering new geographic locations. Restaurants have also been backfilling these vacancies as some landlords redevelop big boxes into multi-unit buildings that attract smaller retailers and restaurants alike. Other owners/investors repurpose the space for non-retail uses including co-working offices or entertainment venues such as pickleball courts inside malls/vacant department stores .
Consumer spending is still strong while rent growth remains steady due to limited excess space on the market; however there is a slowdown in investment sales transactions due to capital market tightening combined with a wide bid/ask spread – particularly concerning single tenant net lease retail below 6% cap rate which struggles finding buyers . On the flip side daily needs retail centers experience greatest investor demand & transaction velocity . Retail leasing remains far from struggling though concessions might be called for (flexibility in rent / lower TI allowance) when bright light shines down on particular center they want to be in .
Ecommerce will continue expanding yet consumers still prefer brick & mortar shopping where they can feel&touch merchandise so tenants & investors need stay ahead offering more options consumers ; ultimately greater certainty paramount kickstarting dormant sector while keeping consumer spending strong throughout rest year
The post Retailers Taking Advantage of Bankruptcy-Driven Vacancies appeared first on CRE MarketBeat.
