Several interesting articles addressing shifts in commercial real estate recently have come through my e-mail feed. One article titled “The retail apocalypse has officially descended on America” by Hayley Peterson from Business Insider, speaks the sad truth of what we could witness here in the Grand Valley, including the closing of major retail outlets that can trigger a chain of reactions among smaller stores.
Consumers have begun to change their shopping habits. The mall, once a destination for shoppers, isn’t so much anymore. The convenience of online shopping has had a major effect on how consumers spend their time and money.
This shift has caused a multitude of major retailers to close locations and rework their operations to become online outlets. Sears is expected to close a total of 150 of its Sears and Kmart locations, while JC Penney will shutter 138 stores nationwide. Other major chains also are expected to close stores, including Macy’s American Apparel, Payless, RadioShack, The Limited and Wet Seal.
When anchor tenants leave shopping centers, it creates a sort of downward spiral among the smaller retailers that remain. In many cases, when an anchor pulls out of a shopping center, smaller tenants have a right to either pull out as well or renegotiate for cheaper rent. Shopping malls need major retail stores to remain operational.
The article also discussed the effects the so-called retail apocalypse has had on such food court outlets as Cinnabon, Jamba Juice and Sbarro. These restaurants have begun to consider their survival without malls. Several of these chains have begun to branch out into airports, theme parks and even kiosks in busy areas to keep their name present and target different crowds. These chains are looking into a future that’s uncertain given shifts in consumer shopping and e-commerce accessibility.
The recent departure of Kmart and Sports Authority and the decline of oil and natural gas development in the area has left the Grand Valley with a lot of larger commercial and warehouse space. Large numbers of businesses once desperate for space have left, leaving a void in our community.
The price per square foot has remained somewhat constant in the past couple of years even with the closures of shopping areas and newly vacant retail and warehouse spaces. For leasing retail and office space, the price has remained around $10 to $12 a square foot for a triple net lease. Medical space fluctuates according to location and newness of the space. Warehouse space varies depending on size and can be anywhere between $5 and $12 a square foot.
The Grand Valley has the potential to become a mecca of the Western Slope. The number of year-round outdoor activities and places to visit within two hours from here is astounding. We’re so fortunate to have destinations in every direction that are among the most desirable around the world.
Why don’t we experience more growth in our area? How do we attract stable businesses to town? How do we make ourselves stand out as a place where outdoor gear manufacturers, retailers, tech companies and others want to set up shop?
The Grand Valley has the potential to reinvent itself and remain afloat despite tidal shifts in the retail market. I’m hopeful we can find answers to the questions I’ve posed. I’m hopeful the community will find ways to make this area inviting for larger companies to station themselves so we have job opportunities, growth and revenue.