Richard Latella, an executive managing director Cushman & Wakefield, who specializes in retail valuation, said before the pandemic there was challenges affecting retail that was under the hood and pushed away.
“We knew they were there, we knew they were coming, but the pandemic has really compressed the changes that were expected to happen to retail real estate over the next few years, and pinched it into a seven- to nine-month time frame,” he said.
“I’ve been through many real estate cycles … This by far is the most challenging, likely because it’s happened so quickly.”
In their prime, departments stores were part of the fabric of towns, he said. But today major chain department retailers like Macy’s, Sears and J.C. Penny are leaving their big-box stores empty and selling off the real estate.
Malls that relied heavenly on big-box tenants began to decline, like Randall Park Mall in North Randall, Ohio.
The mall opened in 1976 as the largest indoor mall in the world, and was later embraced so fondly by the community, that the city’s municipal seal featured two shopping bags. But in 2009 it closed and five years later it was announced that the vacant mall would be demolished to make way for the development of an industrial park.
Amazon opened an 855,000-square-foot distribution center in its place in mid-September 2018.
And while some malls may be demolished, others are being retrofitted. Centurion American Development Group is redeveloping the shuttered Collin Creek Mall in Plano, Texas. The $1 billion project will be redeveloped into a mixed-use community with office, retail and hotel space, as well as residential units and green space.
Ellen Dunham-Jones, a professor of architecture at Georgia Institute of Technology, where she is a director of the Master of Science in Urban Design degree, has been tracking what now is over 2,000 suburban retrofits.
At the discussion she said the majority of the projects were former retail sites.
“Aspirational announcements of mall redevelopments have surged since the pandemic,” she said. “Our database showed nearly 400 either already have been or have announced plans to be retrofitted.”
Central Florida is no exception.
Miami-basedDezer Development is redeveloping the former Artegon Marketplace property into a luxury mixed-use community.
Plans for the project consists of America Landmark Apartmentsbuilding a luxury apartment community (its first ground-up development) in the parking lot of the former mall, and Dezer developing a 500-car museum with accompanying retail and attractions called Dezerland Park Orlando.
Unicorp National DevelopmentCEO Chuck Whittall has plans to redeveloped portions of the old Orlando Fashion Square mall, which would lean heavily on residential uses to activate a new and improved open-air retail center.
In Seminole County, developer Marc Hagle is planning two apartment communities and a 124-room hotel at the shuttered Macy’s store at the Oviedo Mall.
Terrence Hart, a senior director at Franklin Streetwho’s active in Florida, said he’s optimistic about the future of retail.
“Retail doesn’t go away, it gets smaller from a square footage stand point, so these bigger box concepts are not as relevant as they used to be,” Hart said. Retail will evolve, and the tenants will change. “But at the end of the day the retail need is always there.”
ABC Fine Wine & Spirits, has seen sales increase nearly 50% since the pandemic, he said. The privately held alcohol retailer is now expanding, and retrofitting some of its older locations across Florida.
They spent about $2 million renovating its former store in Orlando’s Hourglass District, he said.
Its ABC liquor store at 3097 Curry Ford Road, at the corner of South Crystal Lake Drive, was divided into smaller retail bays. Just recently, Black Rooster Taqueria and Floyd’s Barbershop announced they would be opening a location at the former liquor store.
“The innovation there is a matter of keeping up with the tenants that are successful and recreating their profits to keep up with times,” Hart said.