Big Box Vacancies Showed Impact at Yearend

Tim Genske is a SVP at CBRE.

LOS ANGELES—Despite a healthy year, the retail market saw a slow down at the end of 2016, according to the 4Q16 retail report from CBRE. Tim Genske, SVP at CBRE, attributes the slowdown to nearly 500,000 square feet of big box store space that came online as a result of a slew of store and company closures announced earlier in the year. Among the retail companies to shutter was Sports Authority, Sports Chalet, Golf Smith, PacSun and Aeropostale, while other brands, like Macys and Kohl’s closed select locations.

“The big news last year was a number of bankruptcies that dumped a lot of space onto the market,” Genske tells GlobeSt.com. “A lot of it hit in the third and fourth quarter. We had in the sporting goods sector, we had Sports Chalet, Sports Authority and Golf Smith all go chapter 11, and we had PacSun and Aeropostale go chapter 11, which are primarily mall tenants. There are a few other tenants that didn’t go away but shrunk, like Kohl’s Department Stores exited the L.A. market. So, our net absorption of vacancy boxes actually went negative in the fourth quarter in a few areas of Southern California.”