All around the nation retailers are being forced to close their doors in the face of the recession. Once lively malls populated by a host of busy stores are turning into ghost towns as more people enter into bankruptcy, at least that’s how things are made to seem. However, as many retailers make their exit, they are leaving the door open for a wide variety of unconventional tenants ready to spring from the underground. They come in all shapes and sizes: veterinarians, fitness centers, churches, city halls, art galleries, and even advertisers. With prices low and space available, there are some creative uses being found for our nations “empty” space.Take a tour through downtown New York for example, an area which has been hit hard by many store closings. Instead of seeing the mournful faces of numerous empty (and ugly) buildings, you will more than likely see brightly colored collages emblazoned with corporate logos such as Intel, Nestea, Conservation International and Snickers. Advertisers and property owners are making the best of times by forming symbiotic relationships. Property owners who have had a leaseholder go into bankruptcy and cannot locate a replacement are turning to advertisers to fill that space. With no tenant, their property would languish empty and unkempt. By filling that space with an advertiser, they can ensure their property looks appealing and is paid for. Advertisers on the other hand are finding a great (and cheap) place to put their ads. In this way both sides are helping each other through the recession.
In a recent study released in March by CoStar Group, which overviewed 11,500 leases in the previous six months, various other tenant trends were identified. These covered a wide range including government, educational, medical, and ecclesiastical use. At first glance it may seem improbable that such tenants are taking over the vacant space left from retails fallout. However, after a closer look it becomes apparent that there are some inventive and beneficial developments occurring.
Government entities, which can include DMV’s, City Halls, Military Recruitment Centers and Libraries, accounted for 100 leases in the survey. While such establishments may not be proper for prime real estate, they are suited to occupy the less premium space, such as the wings of a mall. A government entity would need to have access to the entire community, so any potential location would have to be a community center as well, most likely having access to public transportation. Government centers usually sign long term leases (5 to 20 years) but in case of funding difficulties, usually re
quire a 1 year opt out clause contingent on the specific government entity having sufficient appropriations committed for the following year.Educational facilities, such as Satellite Colleges, Beauty Schools, Daycares and Youth Private Schools, recorded 60 leases. In times of recession, educational services often become popular as people out of work decide to go back to school. They offer the benefits of bringing in a large amount of people who patronize surrounding services and are considered good options to fill “junior anchor and anchor spaces at shopping centers”. Churches are another popular option as they too drive traffic to surrounding stores, accounting for 80 leases.
Medical uses represented 160 leases and are becoming “more and more common in U.S. shopping centers”. Retail locations provide medical services with attractive locations due to their visibility and ease of access. Fitness uses are also becoming more wide spread as 350 leases were recorded. They cover a wide area ranging from dance studios to martial arts centers but are said to be “non-ideal” tenants because of higher turnover rates compared to other categories. Nevertheless, they are becoming increasingly popular in retails absence.
Artists have also been very proactive in occupying vacant space. In the United Kingdom, a £3 million plan was announced which is designed to give small loans of £1,000 to people who find creative use for vacant retail shops. Among these are many artists who are now taking advantage of the opportunity to use space they previously couldn’t afford. The plan was created to combat the predicted 70,000 retail closings in the UK this year. In America a similar movement (surprisingly not funded by the government) is taking place. Collinwood, an area in Cleveland, is the sight of a new 10 block “artist village”, which came about when a community development corporation bought 9 foreclosed properties, some costing only a few thousand dollars. Another example is a shopping mall in St. Louis, where artists are moving into vacant retail space to open studios and event spaces for rents of $100 a month. On both sides of the Atlantic artists taking advantage of venues they previously couldn’t have access to.
The examples listed above are certainly interesting; but there are others which are truly weird. In a book written by Julia Chirstensen last year entitled Big Box Reuse, a number of odd uses for vacant retail are described. Such as a Kmart in Austin, MN converted to a museum dedicated to Spam, A Wal-Mart in Round Rock, TX turned into a go-kart track and an Ames department store in Norfolk, VA transformed into an apartment complex. These cases may not be the norm but they illustrate the extent to which creativity can reshape our surroundings.
We often assume that abandoned retail stores have to sit there until some other Wal-Mart, CVS, or Bed Bath and Beyond decides to take up residence. However, it is clear that there are numerous other uses for these buildings. Retail space that goes out of business does not simply disappear, in many circumstances it is occupied by facilities which meet other needs. When a Border’s closes, a hospital can breathe in new life; where a Men’s Wear House shuts its doors there may be an art gallery ready to open them. Though a recession can slow many things down, one thing which it cannot halt is human creativity.
