ATLANTA—Big box retail bankruptcies have made national headlines in the past couple of years. But how is that really impacting the commercial real estate scene? Globet.com caught up with Nick Garzia, director of leasing for Atlantic Station to get his take in part two of this exclusive interview.
GlobeSt.com: How are popular retailers' bankruptcies affecting other retailers and leasing?
Garzia: It's kind of like the flu: there are people who get it and others who think they are going to get it. This starts affecting some of the decision-making. There are several retailers who are struggling, and the closures make healthy retailers more tentative to opening new stores. For historically well-leased, well-located, well-performing shopping centers, having a few spaces open isn't necessarily a bad thing.
GlobeSt.com: What affect do anchor store closings have on developments and what is ownership doing to solve these problems?
Garzia: The thing I don't think people realize when they see articles about mall traffic being down and the death of the mall due to Sears and JCPenney closing, is that Sears and JCPenney have been struggling for the last 15 to 20 years. The other thing the public might not know is a lot of first and second-generation malls were built onto existing Sears, or Sears was the developer themselves, so Sears had very advantageous leasing terms.
So, number one, they're not drawing anything and number two, they aren't paying much to be there. If a Sears were to come back, strong landlords look at that as an opportunity not a challenge whether it be adding more small shops, restaurants or entertainment options. In B or better malls, getting a Sears back is truly a blessing in disguise.
(In 2015, Hines acquired the 586,000-square-foot retail center that anchors the mixed-use development, which also includes three class A office towers, multifamily communities, a full-service hotel and freestanding Ikea, Target and Dillard's locations.)
Is the mall going extinct? Get Garzia's view here.
ATLANTA—Big box retail bankruptcies have made national headlines in the past couple of years. But how is that really impacting the commercial real estate scene? Globet.com caught up with Nick Garzia, director of leasing for Atlantic Station to get his take in part two of this exclusive interview.
GlobeSt.com: How are popular retailers' bankruptcies affecting other retailers and leasing?
Garzia: It's kind of like the flu: there are people who get it and others who think they are going to get it. This starts affecting some of the decision-making. There are several retailers who are struggling, and the closures make healthy retailers more tentative to opening new stores. For historically well-leased, well-located, well-performing shopping centers, having a few spaces open isn't necessarily a bad thing.
GlobeSt.com: What affect do anchor store closings have on developments and what is ownership doing to solve these problems?
Garzia: The thing I don't think people realize when they see articles about mall traffic being down and the death of the mall due to Sears and JCPenney closing, is that Sears and JCPenney have been struggling for the last 15 to 20 years. The other thing the public might not know is a lot of first and second-generation malls were built onto existing Sears, or Sears was the developer themselves, so Sears had very advantageous leasing terms.
So, number one, they're not drawing anything and number two, they aren't paying much to be there. If a Sears were to come back, strong landlords look at that as an opportunity not a challenge whether it be adding more small shops, restaurants or entertainment options. In B or better malls, getting a Sears back is truly a blessing in disguise.
(In 2015, Hines acquired the 586,000-square-foot retail center that anchors the mixed-use development, which also includes three class A office towers, multifamily communities, a full-service hotel and freestanding Ikea, Target and Dillard's locations.)
Is the mall going extinct? Get Garzia's view here.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to asset-and-logo-licensing@alm.com. For more inforrmation visit Asset & Logo Licensing.
