Who Is Filling Those Retail Vacancies?
Unless you have a class "A" space in a great location, it isn't likely that your retail vacancy is going to fill up really fast, even in the improving economy. Leading up to next week's ICSC New York National Conference we spoke with Neill Kelly, president of DJM Realty, a Gordon Brothers Group company that specializes in excess space dispositions. He says that there are only a few sectors of retail expanding aggressively in this environment. And yes, dollar stores are one of them. DJM will be at the Hilton Hotel's Americas Hall 1 Booth #362 at the conference on Monday and Tuesday.
Following is an excerpt of the conversation we had with Kelly:
"It’s the discounters [expanding], and typically the discounters of under 20,000 square feet. To a somewhat lesser degree, you find a fairly strong demand from restaurants. But restaurants are often faced with a lot of impediments to acquiring space that had not previously been what we call a “wet use.” There are health code and parking restrictions. On larger spaces there is plenty of play from the health-club crowd. In a more robust market, they have a tougher time obtaining real estate because of the particular challenges the present at a shopping center with parking and lease prohibitions against their use. Today, they’re finding a bit of an easier road because you have more pliable landlords that might take a tighter parking situation in favor of a renewed increase in foot traffic. L.A. Fitness has been very active and Lifestyle Fitness has been very active when the box size allows. Most people with a dark box of 40,000 square feet or more have health clubs at the top of their list. Also certain parts of the country, we are seeing a lot of activity among small or regional grocery chains. Beyond that, it’s really a mixed bag."
Who are you seeing with big expansion plans in this environment?