Who is going to replace the big box retailers?
As the title states I want to hear some opinions as to who and what type of business is going to replace these department stores (Macys, Nordstrom, JC Penny, etc.)
[{"id": "fs7i0tw", "text": "Burlington, Ross, TJ, Big Lots, Grocery stores, furniture, self storage, mixed use redevelopments.\n\nEdit to add: Gyms, Beauty (Ulta)", "replies": [{"id": "fs7l04d", "text": "+Trampoline parks... hopefully", "replies": [{"id": "fs7r0it", "text": "Upvoted.", "replies": [], "depth": 3}, {"id": "fs7sh2h", "text": "+Gyms &amp; Beauty stores (ulta)", "replies": [], "depth": 3}, {"id": "fs7srtl", "text": "I agree with this being an excellent example of the newer uses allowed in any retail/commercial zoning change and in a mixed use development or redesign.", "replies": [], "depth": 3}, {"id": "fs7zqtt", "text": "There is going to be a wave of experience based businesses like the trampoline park.  Of course you have the existing ones like Ax throwing, Pool Halls, Bowling Alleys, Escape the room, Arcades, scavenger hunts, however there will likely be a new wave of creating businesses we never thought of like a warehouse sized VR room, American Gladiator type course for normal people (maybe get them drunk first?), indoor paintabll/laser tag, courses like that TV show GUTS, etc.", "replies": [{"id": "fs88erc", "text": "add: Legends of the Hidden Temple", "replies": [], "depth": 4}, {"id": "fs9w52i", "text": "Not anytime soon.  Yes before Covid-19 retail as a whole was going towards retailtainment, experience based offerings that could provide something that can't be recreated at home, but as seen with markets that are recovering, customers are slow to resume normal behavior.\n\nWhile there will be some segment of the population willing to go, a lot of those you highlighted are designed with surfaces that are to be touched multiple times, making cleaning difficult and costly.  \n\nSo while I agree experience retail will be what grows, in the near term those uses would be very risky IMO.", "replies": [{"id": "fs9wpvm", "text": "Eh, you\u2019re assuming covid will have a lasting effect on people. I think we\u2019ll pretty much be back to business as usual a year from now, provided we don\u2019t hit a second wave in the winter", "replies": [{"id": "fsa51c0", "text": "Based on other market that are in recovery, it will take at least a year unless there\u2019s a second wave.  Also, I said not in the near term, maybe you missed that?", "replies": [{"id": "fsa5bd4", "text": "Near term to me is the next decade. No need to get condescending", "replies": [{"id": "fsa5udj", "text": "Eh, ironic you would say that. Also, a decade is called a long term lease, so not sure who thinks 10 years is short term.", "replies": [], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}, {"id": "fsauw6g", "text": "I agree with your points.  My post wasn't meant for the short term.   I think there is going to be way more pain in the retail space for the next year. But eventually new businesses will sprout up over the next 2-5 years.", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}, {"id": "fs99cda", "text": "Ahhh yes!! The only reason I visit my parents is for the trampoline they've had for 10 years. If only there was a trampoline park near me - I can avoid my parents who ridicule me for not attending church 3 times a week.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fs7jpp2", "text": "The shutdown accelerated what was already coming. Meanwhile, Walmart, Target, and grocery concepts are flush with cash. I wouldn't be surprised to see WM &amp; Target cherry-pick a few prime locations, and Aldi &amp; Lidl grab some as well with their expansion plans. The retailers that are dying are the ones who didn't evolve.", "replies": [{"id": "fs9wauf", "text": "The problem is that Target and Walmart already have enough locations, and don't really need to open new ones.  Yes there are a few locations where they could improve their positioning, but when you do an incremental analysis I'm willing to bet the incremental return is low when compared to the same amount of capital being spent on something like remodels for multiple stores.\n\nNow Aldi and Lidl are definite players, as well as some Dollar formats.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fs7ocpt", "text": "I wouldn\u2019t be surprised to see apartment/industrial redevelopments made. You\u2019ve got a big box, and a need to onshore more of your supply chain. To me that screams warehouse/logistics center, or light flex manufacturing.", "replies": [{"id": "fs7t8ah", "text": "Another excellent example of how retail commercial and mixed use will change. I stated in a comment on this thread that we\u2019re going to see any new big box as stand alone and not anchor tenants in a mall. This is a perfect example of not only a stand alone but one with more functions and integration of their business model, logistics and supply chain.", "replies": [], "depth": 2}, {"id": "fs7zibb", "text": "Will cities want to see this happen though? Generally, these big boxes are in more prime locations. Doesn\u2019t scream manufacturing center or logistics center to me from a city planner\u2019s perspective.", "replies": [{"id": "fs7zs5g", "text": "That\u2019s a fair point. I can see developers salivating over sites. But I\u2019m sure that city officials get queasy talking about industrial spaces in these spots. It\u2019ll obviously be a case by case \u201cwho can win this discussion?\u201d But again, that\u2019s a good point I hadn\u2019t considered!", "replies": [{"id": "fs801ex", "text": "Might be worth keeping an eye on. If the logistics/manufacturing side wins, those cities could likely see a shift to a new shopping center. Worth trying to get ahead of the curve if that happens.", "replies": [], "depth": 4}, {"id": "fs8qalx", "text": "I think it's possible but more than likely the land value probably make most industrial developers go pencils down on the in-fill sites these big box stores are on. That's why most in-fill logistics centers that are all 80's and 90's vintage in the gateway markets, they're really covered land plays. The only exception I can think of is those huge outlet malls, but they tend to be fewer and far between and were doing well pre-COVID, so it's not an absurd expectation they will do well post-COVID as part of the omni-channel that good retailers are doing.", "replies": [], "depth": 4}], "depth": 3}, {"id": "fs82h4c", "text": "I think that's true in some cases, but not all.  Mixed-use redevelopment is an option, but some non-prime locations will definitely switch to logistical operations.   For many suburban malls, I would be hard-pressed to describe those as prime, beyond the fact that they're a big draw for rich areas.  But often they're not natural prime areas, they created their own draw.  I think supply chain analysts love the idea of running logistics out of those spaces.", "replies": [], "depth": 3}], "depth": 2}, {"id": "fs9wqw8", "text": "Agreed on the big box, but one thing to consider is that many big boxes weren't made for distribution.  They will have maybe two or three dock doors in the back and that's it.  If you were storing and moving slow moving freight that's one thing, but with these big boxes in neighborhoods and an expectation for them to probably be moved quickly, the design of a big box isn't ideal.\n\nAnd it's not like you can quickly and easily convert a big box to a cross dock facility, or anything.", "replies": [], "depth": 2}, {"id": "fstos2c", "text": "Needs to get rezoned - cities want sales tax. Industrial is a really hard conversion due to trucks", "replies": [], "depth": 2}], "depth": 1}, {"id": "fs7ryvy", "text": "New zoning changes and redevelopment zone designations for mixed use. Retail on bottom and apartments on top. Smaller retail and not big box. \n\nI also think that we\u2019ll soon see big box retail as stand alone and not serving as anchor tenants to the larger malls. \n\nArchitectural designs will try to reflect ability to increase change over to one or the other depending upon an increase or decrease for the demand in either sector. This mixed use design will also allow for other users besides retail and market rate residential apartments, pending consent from the owners/developer and the local planning/zoning board and redevelopment agency. Demand which translates into revenue will dictate the big picture. \n\nThere\u2019s also going to be an increase in the commission of Blight studies for best use to allow for the establishment of redevelopment zones for the purpose of multi year tax abatements in addition to other obvious reasons listed here. \n\nThe one constant I see is that Eminent Domain will not be part of any new redevelopment plan if there are any small businesses or residential parcels requested to be part of or to expand their development plans. \n\nThis is my opinion based on the North Jersey market in which I am most familiar with. Would love to hear your thoughts, comments and opinion.", "replies": [{"id": "fstou59", "text": "You wanna live on top of a power center?", "replies": [{"id": "ftadt1d", "text": "What is your definition of power center? This is not an industrial zoned mixed use with residential. I\u2019m referring to a commercial, retail, residential mixed use that exist all over North Jersey.", "replies": [{"id": "ftai3dw", "text": "The ICSC definition. Your argument makes sense in some cases, but not for the majority of big box retailers (a list that would include sports authority, toys r us, etc). The initial question was around big box, but then referred to department stores, which are a bit different.", "replies": [{"id": "ftjy8y4", "text": "You obviously didn\u2019t read my post. I specifically mentioned that these new mixed use mall developments will not have big box as anchor tenants. I stated that we would see more big box as stand alone buildings. \nI am also referring to the North Jersey market.", "replies": [{"id": "ftk52me", "text": "You mean like the stand alone JCP and Walmarts?", "replies": [{"id": "ftla1hq", "text": "Yes and more so standalone Home Depot\u2019s", "replies": [{"id": "ftlbdml", "text": "Based on some brokers I've spoken to (have not talked to HD about this) they may begin pursuing a hub and spoke model. Smaller stores for retail clients with delivery for contractors.", "replies": [{"id": "ftlbxva", "text": "Great point and I see this already in the planning stages in some older retail malls.", "replies": [], "depth": 9}], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}, {"id": "ftjyvag", "text": "The initial question asked what is going to replace big box anchor tenants at Malls. You obviously didn\u2019t read or understand the question.", "replies": [{"id": "ftk4yzy", "text": "Alright, I'll change my answer my you want to live in a mall?", "replies": [{"id": "ftlazd1", "text": "You don\u2019t have to change your answer, it\u2019s a very good point. I\u2019m just stating that I wasn\u2019t referring to the big box tenants you were referring to. \n\nAs far as living in a mall, it depends upon your current definition of a mall. This is what the question and my answer was about. In North Jersey, NY City and the outer boroughs, this is a common mixed use development. What always appears as weird, different and unimaginable is only because we\u2019re used to things being the way they have been. \n\nIn this area I\u2019m referring to, location isn\u2019t necessarily or often the prerequisite of a potential development plan. Location is created. People live in, around, near and on top of many other things that others would never think of in different geographic and demographic areas. There is a large and vast population and density here with limited space.", "replies": [{"id": "ftlbgq7", "text": "Fair point. Especially if city centers become less desirable post pandemic.", "replies": [{"id": "ftlcsu2", "text": "It\u2019s going to be interesting to see what happens in the post pandemic city centers and high rise residential apartment building. Especially the 50 to 90 story residential developments and the high priced rents in the downtown areas like Hoboken and Jersey City. Both were built up because of their close proximity and views of Manhattan. \n\nMass transit is going to take a big hit also which makes these developments even less desirable. But the increase in vehicular traffic, lack of infrastructure improvements and inability to expand and widen the main arteries also add to the problems. \n\nThe majority of the malls we\u2019re referring to are located in the suburbs not far outside of these city\u2019s.", "replies": [{"id": "ftlouc8", "text": "Unrelated to prior convo, but I'm curious how the mall owners will approach these redevelopments. Very expensive. Assuming a lot of JVs as minority partners.", "replies": [], "depth": 10}], "depth": 9}], "depth": 8}], "depth": 7}], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "fs7t1jq", "text": "We are like 8-12 months away from every vacancy in every asset class becoming an Amazon fulfillment center.", "replies": [], "depth": 1}, {"id": "fs7uqxz", "text": "Good question.  I think the answer is pretty complicated though.  It's possible the stores you mentioned in the title may halve their square footage if they don't fold up entirely.  Considering that these mentioned stores have the most prominent  retail exposure, there may be others who will want it.  But who is that? Well, I still think that people want to shop.  Even as those who were reluctant to buy online are now doing so as a result of the lock down, there are  still some goods we want to touch, try on, and see first hand before we buy.   So take a look at your own buying habits and your spouse/SO and you might get some insight as to what is going to happen.  For me personally, I know my wife cannot wait to get out and \"shop\" for no other reason than it is her natural habitat.   Not a huge spender, but a huge looker.", "replies": [], "depth": 1}, {"id": "fs7w1wu", "text": "I think we\u2019ll see some alternative big users like hospitals and surgical centers taking some of the boxes. Where housing demand remains strong you could have Redevelopment opportunities to go\nMixed use with apartments/condos/etc and re-merchandise the remainder of the property.\n\nAnother shot in the dark - but I also think there\u2019s opportunities for other warehousing style uses that require space but not exposure like data centers. As more and more places become data dependent maybe it becomes feasible for smaller data center facilities or more desirable to have them closer to your offices or areas of control (like for local and state Governments and their various departments)", "replies": [{"id": "ftlbmvu", "text": "Excellent point on hospital (outpatient) and same day surgical centers.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fs87xxq", "text": "The thrift store", "replies": [], "depth": 1}, {"id": "fs8sfuz", "text": "Last mile DC", "replies": [], "depth": 1}, {"id": "fs8wczj", "text": "Dollar Stores, Dark kitchens", "replies": [{"id": "fs9wthb", "text": "Don't know what you do with a 100,000 SF dark kitchen.", "replies": [], "depth": 2}], "depth": 1}, {"id": "fs99t6q", "text": "Retail storefronts might disappear... but with man the amount of shipping boxes I get someone needs to create a new shipping system with fewer boxes.", "replies": [], "depth": 1}, {"id": "fs9e0t0", "text": "I think entertainment and restaurants will prevail. Sports stadiums, trampoline parks, skate parks, laser tag, escape rooms, etc. people are social and have to get out. Lots of shopping is done online, but if people can\u2019t break away from home they go crazy.", "replies": [{"id": "fstoydq", "text": "Will be plenty of empty restaurants post covid to backfill", "replies": [], "depth": 2}], "depth": 1}, {"id": "fsb77ez", "text": "Affordable housing", "replies": [], "depth": 1}, {"id": "fsp57w6", "text": "I didn't see anyone mention the CC&amp;Rs and use restrictions that often come with these boxes that can (not always) drastically limit what can be done with the boxes. Sure someone can work to modify the CC&amp;Rs and use restrictions but there is no certainty to getting that done.  It will be a slow process to get the use changed in those cases.", "replies": [], "depth": 1}, {"id": "ftg3cjw", "text": "Dave and busters , hopefully. The place where dreams come true.", "replies": [], "depth": 1}]