Ruggerio discussed with GlobeSt the recent press received by The Good Guys, an electronics retailer that is considering closing down several Puget Sound stores. "Everybody likes to focus on the 'oh, no' of a chain going away. They forget that when you see companies like Home Base, Ernst and The Good Guys leaving the market, the dollars that were being spent there are being redistributed to better retailers--they don't just go down a hole."

Ruggerio, a broker with the Poulsbo-based First American Properties, represents a number of large retailers in Washington, including Circuit City, a competitor of The Good Guys, which has announced several store closings in the region. He says ill-conceived plans and over-extension are the cause of many of the "corpses in the rear-view mirror. Some companies, he offers, are now struggling because they leveraged themselves too far and don't have the sales to cover their costs, including pricey leases.

Concentrating his efforts west of the Cascade Mountains, Ruggerio says his workload has yet to slow, and he has racked up many recent transactions from Vancouver to Burlington. He says some of the major retail areas are still drawing new customers. "There are lots of retailers still wanting into Northgate and Bellevue."

Ruggerio tells of an interesting trend of late where big-box stores are getting innovative with their formats in some markets. "If a company with a 140,000 to 180,000-square-foot store wants to enter a market with high land values and a scarcity of blocks with foot prints large enough for them, they have to get creative." Some companies he says, are getting into the redevelopment act and breaking tradition and by going to two-story formats. "Home Depot, for one, is looking to experiment with its format in urban and tight suburban markets," says Ruggerio.

Whether redeveloping, leasing or building to suit, Ruggerio paints a picture of a very active big-box market, but one where companies are paying close attention to the bottom line and staying lean when it comes to paying for space.

Instant Insights /

Big Box Retail Market Remains Healthy

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