What Retailers would you go long on to take up all these strip-centers, malls, and destination centers?
I understand there's more to fill the space than simply retailers, (ie. last-mile distribution or multi filling malls) but I would like to know who you see as new retail competitors filling spaces such as JCP, Sears, KMart, etc.?
My thoughts are IKEA (maybe away from their standard, high ceiling facilities), Aldi's, Amazon Basics, and maybe some sort of pharmacy killer (something to take out CVS, Walgreens like PharmacyRX).
I wrote a long reply yesterday, but for some reason it wouldn’t let me post, so let me try again.. Depends on the space and location. As @CRE has mentioned, Amazon is after those spaces.
However, that wont turn around a center, it’s definitely just plugging a hole of a leaking boat, and for a lot of centers it makes sense as the US is overbuilt on retail. There are other property’s where a different strategy makes sense. An ideal retail center drives foot traffic at various times of the day and encourages cross shopping patterns. So, imagine you wake up head to shopping center to the gym, grab a cup of coffee, pick up/drop off your dry cleaning and then head to work. After work you swing back by the center on your way home to either grab a quick bite to eat, or to do some grocery shopping. You have made 2 trips to same center, and as @redever mentioned maybe you even have an office here at a co-working space. Look up Santana Row in San Jose, CA as an example.
Ideal tenants to back fill these large boxes would be grocers, (Whole Foods, Sprouts, Aldi, etc), Retailers like Target and Walmart, and fitness users pre COVID (obviously COVID has changed the outlook on gyms).
In some cases, it might make sense to completely scrape the box and to build residential units on site to create “live, work, play” communities.
In one of the more interesting uses I have seen, Austin Community College turned an old JCP into a campus
This in a big way. A lot of dying malls are terrifically located, graded/flat, with utilities already in place, etc.
Absolute prime locations.
I've seen Target and grocery chains at some malls takeover former anchors. It makes sense and has been successful. I've heard gyms as well being other possible tenants, but like you mention covid may have changed the outlook for gyms. I think movie theaters might present some potential. A lot of developers have certainly focused on revamping malls to be more lifestyle-oriented and outdoorsy too. A big focus on experiences around dining, entertainment and retailers that use smaller spaces but have kept better pace with the e-commerce experience. This model is growing in popularity in California just because the weather is so favorable most of the year offers a "place making" component that was once the mall.
Definitely lots of ideas to demolish and build multifamily housing, but it seems like progress on that has been quite slow and just harder to get approval for.
Solid
Co-working style office operators
For mall anchors, Amazon is already after those spaces for warehouse/distro locations.
There's been talk about Amazon almost "reversing" what most retailers are doing by adding physical locations. Some have mixed reviews as to whether these will work, and personally I believe they will. As I stated above, I think many retailers who will succeed in absorbing this space are those which already have a digital footprint and don't need to spend much on advertising (ie IKEA and Amazon, My Pillow, Warby) are already behemoths by name. Would be great to hear your opinion on this step away from the strictly digital footprint.
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