At the end of 2019, Sears’ owners are planning to close 142 Sears outlet stores. Due to bankruptcy, about 500 more Sears and Kmart retailers are going downhill.
Proprietors of malls are worried. Sears outlets will be vacant, and it will be difficult for them to quickly find for occupants to fill the massive, empty lots. Sears outlets average to up to a hundred thousand square feet, and they rent more than a single level. Although other stores can occupy the soon to be vacant spaces, refurnishing must be done.
Companies like At Home, U-Haul and Burlington are bidding to move into some spaces vacated by Sears.
A representative from At Home said that they have been scouting the Sears and Kmart outlets that can cover which will accommodate their space requirements.
Since the Sears declared liquidation, U-Haul wants to get 13 Sears stores, together with 12 Kmart outlets, for an amount of $62 million. Analysts stated that the call for the workspace of several companies in the U.S is getting bigger resulting in a desire to occupy the space vacated by Sears.
Tom Kingsbury, the CEO of Burlington, mentioned to their investors that Kmart outlets could help their company grow since they are placed in locations in line with their business strategy. He also assured that they could buy a portion of the Sears’ space if the owners decided to sell the building by shares.
A real estate convention organized by ICSC was held at the East Coast. In the session, property-owners stated that the destruction of Sears would have a lower cost than occupying the vacated space. In the mall, the management decided to divide the Sears space so that it can be leased by more than one company. In Viewmont Mall in Scranton, Pennsylvania, PREIT converted the Sears space into areas for Dick’s Sporting Goods, Field & Stream, and HomeGoods.
Nick Hernandez, Transwestern’s head of retail services said in an interview that most landowners would like to tear their building down rather than occupy it again because things will not work the same way.
Take Esplanade at Adventura located in Adventura, Florida for example, Seritage will establish a classy restaurant next year. The lot for the restaurant is from the demolition of a former Sears.
According to Greg Maloney, America’s retail division’s CEO, the Seritage is looking for more possibility in applications for vacant Sears’ buildings. The planning might take longer, but he is optimistic about their research.
As per Maloney, splitting the Sears outlets can charge the owners to around a hundred dollars per square foot, while tearing down can drop costs to approximately $30 per square foot, which is a lot cheaper. This proves that demolition has a way lower cost than dividing the spaces.
Maloney stated that a lot of options must be weighed before initiating big changes. The appropriate decision is dependent on the site and the people working behind it.
As part of the ICSC session, the ideas spoken by landowners with starting up co-working companies are one of the central points. Recently, mall managers are thinking of putting up their spaces to be leased by fine-dining, healthcare supplies, and several other outlets.
Colliers International retail services’ director, Anie Solanki mentioned that the new tenants of the vacated Sears outlet would be charged a higher cost because of the refurbished building. Some of the stuff left by Sears cannot be used anymore, or they might not be significant in the line of business. She added that demolition is necessary to lessen the cost of expenses.