As the retail portion of commercial real estate continues to evolve, the question of what to do with all the empty "big box" store space evolves as well. The latest innovation is to turn them into distribution centers. With the advent of online retailing, companies have been innovating ways to get the merchandise to the customer faster and cheaper. This has led to the rise of local and regional distribution centers to get the merchandise closer to the customer. Utilizing long closed big boxes or big box spaces in malls or shopping centers for distribution solves many problems for property owners and online retailers. Stand alone properties are the most popular because they generally don’t need to be torn down and rebuilt. The longer the property has been vacant, the better as there is generally less push back, especially from surrounding retail. Think about it. High ceilings, wide spacing between columns and slabs designed for weight are already in place. The conversion costs are minimal and lead times are cut drastically. Over two dozen such industrial redevelopments have kicked off since 2016 on over 8 million square feet of retail space. The trend will continue as long as the supply of empty big boxes remains. The main problems encountered are zoning approvals and community push back. This is offset by creating jobs and tax revenues not available when the property is vacant.
Another way to recycle a big box that is gaining popularity is mixed use redevelopment. Long dormant strip centers are being demolished and turned into mixed use developments with a mixture of retail, office, residential, restaurants and even motels. Their proximity to transportation corridors, other supporting retail and residential make them a prime candidate for redevelopment. We have such a redevelopment underway in our area right now. A long dormant strip center once anchored by Kmart and a grocery store is being torn down and converted to mixed use, eliminating a eye sore and improving the area where it is located. The Atlanta Commercial Group is active in retail redevelopment and stand ready to assist investors and businesses in all phases of retail, mixed use, residential, office and industrial development.
