Brick-and-mortar retail has been in a death spiral for years. Thanks to Covid-19, we can no longer kid ourselves that some type of retail revival is just around the corner. Nope, it’s over. And now we have to figure out what to do with all those empty storefronts.
Before the pandemic, retail was in decline mostly due to online competition, increasing popularity of big box stores, and changing consumer preferences (less buying stuff, more buying experiences). There were pockets of resistance to this trend, partly out of desire to support local business, but now that just about all of us have made the switch to Amazon, there’s no going back. Online shopping is just too convenient.
So what are we going to do with all that empty retail space? The obvious answer is to re-purpose the space for non-retail. Here are thirteen possibilities:
Short-Term Options (just in case storefront retail comes back): Short-term options include pop-up shops, restaurants, and art galleries. Expert Panel, Forbes Real Estate Council
Community Centers: Larger retail spaces with good parking make perfect venues for multipurpose community centers. Space can be divided into meeting rooms, gyms, and satellite office space for nonprofits. Another great use is repurposing the space as a library branch and subdividing the interior into reading rooms, computer labs and study centers. Expert Panel, Forbes Real Estate Council
Co-Working or Flexible Office Space: Co-working or flexible office space is becoming increasingly popular and has been replacing or enhancing retail in some places. Expert Panel, Forbes Real Estate Council
Small-Scale Manufacturing: Small-scale manufacturing is alive and well in America. Retail space could be rented by craftspeople making or creating clothing, jewelry, household items, or decorative art objects. University of Wisconsin – Extension, Center for Community and Economic Development
Self-storage: Converting larger retail space into self-storage facilities is already common in the market, with an average cost savings of 30% versus building new. Kennedy Funding Lending Lounge
Adult Schools and Community Colleges: Some larger retail spaces have been successfully repurposed as new schools or additional campus space for local community colleges. For example, Austin Community College converted a distressed mall property into a new campus. Cheatsheet
Apartment complexes: The oldest indoor mall in the country recently converted its second and third floors to micro-apartments. Other cities are taking notice and drawing up their own plans to turn commercial mall space to residential communities. Cheatsheet
Co-living Space: Co-living, defined as “any shared living space that improves quality-of-life for its residents,” is catching on in many cities where space is at a premium and loneliness abounds. Retail spaces are often on the ground floor of multistory buildings. Top floors could be converted into micro-apartments and the ground floors converted to common areas for residents. Medium
Government Offices: Government agencies are increasingly taking advantage of empty storefronts. For example, local departments of motor vehicles, community service agencies and USPS branches are moving into vacant spaces in strip malls. Henry S. Miller
Medical Offices and Health Clubs: Outpatient clinics, urgent care centers and diagnostic services often make good neighbors for restaurants and retailers. Henry S. Miller
Distribution and Warehouse Facilities: Old malls often offer ample space for distribution and warehouse facilities. And because they are often located along highways, they provide easy access to lines of transportation. Henry S. Miller
Day Care: Retail space that includes an outdoor area and a few dedicated parking spaces (to drop off and pick up kids) could be converted into day care centers. University of Wisconsin – Extension, Center for Community and Economic Development
Professional Services: Professional service providers include architects, accountants, engineers, lawyers, tax advisors, psychotherapists, IT specialists, career counselors, and business consultants (to name a few). University of Wisconsin – Extension, Center for Community and Economic Development
Despite all the great ideas for repurposing already existing retail spaces, empty storefronts will continue to be a problem as long as we keep building more retail space. That means local governments have to stop requiring housing developers to include retail space at ground-level, as well as to change zoning regulations to allow non-retail operations in traditional retail areas. This has been a problem for years. As one commentator put it in 2018:
Having seen and experienced great streets and neighborhoods with ground-floor retail, urbanists today assume that, to build a great neighborhood, you need to have a lot of ground-floor retail. Ignoring that causation may work both ways here, they settle on the easiest solution: mandate it wherever possible. The result is the empty storefront blight that we now see in cities across the country. “Mixed Up Priorities for Mixed-Use Buildings” Nolan Gray/Strong Town
Those empty story fronts will be with us for a while but if the local movers and shakers finally accept that retail is over, something better will come along eventually..
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Note: This post is a repurposed and greatly expanded version of Now That the Retail Apocalypse is Here, How Are We Going to Fill All Those Empty Storefronts?
References:
“Creative Uses for Downtown Buildings in Small Towns” University of Wisconsin – Extension, Center for Community and Economic Development March 2017
“Nine Creative Ways For Investors To Repurpose Empty Box Stores” Expert Panel, Forbes Real Estate Council June 10, 2019
“Repurposing Vacant Retail Space” Henry S. Miller June 17, 2019
“The Co-Living Space of the Future: Repurposed Retail Space” David Grasso/Medium Apr 24, 2018
“Unique ways to repurpose a vacant standalone retail property” Kennedy Funding Lending Lounge July 26, 2018
“What Will Happen To All That Failed Retail Real Estate? Here Are a Few Creative Ways People Are Repurposing Empty Stores” Lauren Hamer/Cheatsheet May 13, 2018
“Nine Creative Ways For Investors To Repurpose Empty Box Stores” Expert Panel, Forbes Real Estate Council June 10, 2019