Thinking Outside the Big Box

What happens when the grocery store or the discount store in your neighborhood closes? What once was a thriving business is now just a big, dark box. The merchant removes its merchandise from the store, the signs come down, and in no time trash collects, weeds grow, and vandals create their art on the outside of the building. Or worse, the property becomes an unauthorized used-car lot. The adjacent merchants that were once attracted to the site now are concerned about their survival because they no longer have the draw of a major anchor. If the vacancy persists, many small shops will fail, and if they’re replaced, they may be replaced with lower-quality merchants.

This is a worse-case scenario, but it does happen. The good news is there are alternatives. The best situation is that a more viable, more successful retailer will move in and have a positive effect on the neighborhood as well as the neighboring merchants. This happened when Hy-Vee grocery stores replaced Schnucks in the Kansas City market. It also happened when Home Depot razed two abandoned Venture buildings at I-435 and Bannister and at 95th Street and Metcalf to replace them with home-improvement stores. Many of the former Venture stores were replaced by Kmarts, and, despite Kmart’s bankruptcy, the Kmart stores have done more volume and have attracted more customers to those shopping centers than Venture ever did.

The replacement tenant doesn’t always have to be retail. It may require a change in zoning, but some of these large retail spaces are perfect for industrial uses like storage, light manufacturing, assembly or distribution. The buildings usually have the ceiling heights, the docks, and the thoroughfare locations that make them desirable as industrial facilities. Office users who have large space requirements like call centers also are attracted to big boxes because of the wide-open interior spaces and high parking ratios—typically over 5 cars per 1,000 square feet.

It takes major remodeling to convert a retail store to an office use, but it can be done.
In addition to retail, office and industrial uses, there are other specialty uses that might be attracted to a closed retail location. Many nontraditional users, such as churches and post offices, have purchased or leased big boxes and have made a positive contribution to the market and to the surrounding area.
Malls that have lost large anchor tenants also have to be creative to prevent an exodus of shops
and shoppers. The Wards store in Oak Park Mall, for instance, is being replaced by a new Jones department store while the former Wards store at Ward Parkway Center is being razed and replaced by a new Target. Additionally, Ward Parkway has taken an aggressive step by tearing down some of its mall shops to open part of its upper floor for strip center-type spaces where customers can park outside the door of the store they patronize. Bannister Mall is planning a major renovation by razing the northern portion of the center for a new Bass Pro Shop that will be the impetus for the rebirth of the property as Three Trails Mall.

It takes an aggressive property owner, a real-estate expert and, of course, money to make these good things happen. But it can be done and should be done to protect the property values of the shopping center and neighboring residences. Often a property makeover requires a partnership between owner and city to do what’s best for the community. A mutual and realistic understanding of what the market will and will not support can help make the property the attraction it once was.

Carl A. LaSala is president of LaSala-Sonnenberg Commercial Realty Company. He may be reached at 913.362.1000 or at carl@lasala-sonnenberg.com.