On line shopping that causing Retail Real Estate to Convert to Warehouses.
Our research team’s was reporting in December 2018 that retail real estate left behind by the retail industry’s digital evolution can find new life as warehouses and e-commerce distribution centers in 2019. According to Mr. Kambiz Merabi this conversion projects are currently occurring across the U.S.
MOG found various types of retail-to-warehouse conversions, including demolition of obsolete malls to rebuilt as warehouses in Baltimore, Atlanta, Chicago, Detroit and several markets in Ohio. Other retail structures were left standing and re-purposed for industrial uses, including a former Toys ‘R’ Us in Milwaukee now occupied by a business that re-manufactures transmissions, Sam’s Club’s conversions of several of its stores to distribution centers, and sears department stores.
The conversion trend, while growing, remains a niche in the industrial-and-logistics real estate market. Still, it draws momentum from ongoing factors in each industry: Demand for warehouse space is so strong that vacancies are at or near historic lows in many markets. Meanwhile, though the broader retail market is healthy, closures by national big-box retailers and department stores have created opportunities in many cases for nonretail uses to move in.
“In nearly every market in the U.S., there are sites where this kind of repurposing could work, at least on paper,” said
Mr. Kambiz Merabi Head of MOG’s Research Team LA. “But many conversions are more challenging to execute than it might seem, given that the developer-owner of each site often needs to get a wide group of stakeholders to agree on a fairly dramatic change.”
Location An Advantage
Factors favoring retail space for conversion include the prime location of many retail centers, which often sit at busy intersections or highway interchanges. Another advantage: Site access. Standalone big-box stores, in particular, offer backed docks and easy access for trucks. They also have the high ceilings needed for distribution uses.
Finally, some retail spaces simply are available, which isn’t always the case for industrial properties in many markets. Most of the conversion projects analyzed by MOG’s Research Team LA are in markets with vacancy of less than 5 percent for industrial-and-logistics real estate.
MOG E-Newsletters » Los Angeles Edition| Written By Mr. Kambiz Merabi’s editorial team | Posted By Gibran Escobar | January 3, 2019 8:22 AM PT
To contact about this story: Contact Gibran Escobar at MOG LA Office firstname.lastname@example.org , To contact the editor responsible for this story: Kambiz Merabi at MOG contact his assistant Fidel Hernandez, or call our LA Office at 818-817-0006
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Mr. Kambiz Merabi’s Article/s Published January 3rd, 2019 LA, has been Updated & posted at 2:01 PM PCT, February 3rd, 2019.
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