Posted on 10/10/2019 2:01:31 PM PDT by 2ndDivisionVet
It may have been unthinkable ten to fifteen years ago, but the shift in consumer shopping patterns from brick-and-mortar stores to online platforms has resulted in the emergence of retail-to-industrial conversions over the past few years. With lower demand for retail space in many markets, several developers and major retailers have seized on the opportunity to convert defunct or underperforming malls and big-box stores into warehouse and logistics space for their operations.
The trend has been most noticeable in regions where the median household income is below the national average, offering a workforce that demands relatively lower wages, and where industrial vacancy rates are low, about 5% or lower. Retail centers in these regions are often selected because they are located closer to neighboring population centers than traditional industrial areas, reducing delivery and transportation costs. The converted retail structures also commonly include multiple dock entrances, large parking lots and high ceiling heights – a perfect combination for warehouse and logistics uses. In some cases, the structures are abandoned entirely and razed in favor of constructing a new warehouse complex or industrial park.
One prominent example is the conversion of the 2.2 million square foot Randell Park Mall in suburban Cleveland, originally constructed in the mid-70s. The entire structure was demolished and a developer constructed a 900,000 square foot “fulfillment center” warehouse for Amazon. The location near major highways was a significant reason for the Mall’s initial success as a retail destination, and that location also provides advantages to tenants like Amazon, who need regional distribution centers with convenient access to highways to reduce fuel costs....
(Excerpt) Read more at jdsupra.com ...
Capitalism and market economics in action.
Retail capacity was catastrophically overbuilt prior to 2008. After the near nuclear meltdown of the Financial sector due to the popping of the fraudulent housing bubble, I went to Las Vegas for a party. 2 out of every 5 storefronts were vacant and for lease. It was unreal.
Starbucks made a wise choice closing half their stores.
Add to this the digital revolution in shopping, and no wonder there is so much brick-and-mortar retail square footage available at bargain basement rates. You still see empty store fronts everywhere 10 years after the housing bubble popped.
It should be converted into affordable housing for millennials.
Yup. About 50% of a failing local mall has been converted to a medical campus by Penn Medicine.
It’s actually been pretty good for the remaining retail stores.
Brilliant.
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