What's Next for Shuttered Theater Properties?

PORTLAND-Overbuilding in the movie theater industry has bankrupt several movie theater chains and shut down hundreds of theaters nationwide. The situation has thrown these theater properties back onto the market with a vengeance. The problem is finding a tenant to lease the space.

Mark New and Steve Neville, partners in retail-focused New & Neville Real Estate Services in Portland, OR, say the best thing about theater properties is they have abundant parking and great signage. The biggest problem, they say, is the sloped floor, which can cost $25/sf to fill.

“That’s not a cheap fix,” says New. “So first you try to market it to a use that can use it as is, such as performance-related activities. For example, New this week is showing a vacant theater property to a woman who wants to use it as a dance studio.

If things like that don’t pan out, says Neville, one should start thinking about marketing to those with the wherewithal to demolish and redevelop. Grocery stores, successful warehouse retailers and strip mall developers are always on the hunt for urban in-fill locations with abundant parking and good signage.

The industry has added some 12,000 screens in the past five years, bringing to 36,000 an inventory many educated observers say should be closer to 26,000. As a result General Cinemas, United Artists Theater Co., Edwards Cinemas and Carmike Cinemas — owners of a combined 6,300 screens — all have filed for bankruptcy, and are actively trimming older, less profitable locations from their books.

A related story on the national page of GlobeSt.com today tells what is happening to closed movie theaters in other parts of the nation, including conversions to bookstores and furniture outlets.