Financial setbacks have spurred some retailers to shutter locations this year. But those closed doors may open opportunities for expanding retailers in 2025, according to a report from Northmarq, a commercial real estate capital markets firm. In fact, Northmarq estimates that openings and expansions will exceed closures during the next few years.
Some of the stores may stay vacant for a while, but retail brands like Ollie’s Bargain Outlet, Barnes and Noble, Burlington, Michael’s and Haverty have recently taken leases as other big box stores closed their businesses, the report says. Through this strategy, tenants have made use of high-traffic sites and managed expansion in a low-vacancy market.
The challenge is that single-tenant net lease retailers often have strict construction and branding guidelines, requiring build-to-suit solutions, according to Lanie Beck, Northmarq senior director of content and marketing research. When a takeover isn’t practical, “it is more likely that shuttered freestanding and junior box locations will be targeted by tenants with more flexibility, such as independent businesses looking to serve their local consumer base from an upgraded location.
“Redevelopment or demolition also becomes an option, especially for sites with
good ingress/egress,” Beck writes.
Retailers like Lowe’s and Walmart have said they’re interested in starting to grow again, Northmarq says.
Who’s on the move
The Northmarq report lists sectors “expanding most aggressively,” including quick-service restaurants, convenience stores and discount stores. The report lists retailers expected to close and those looking to expand into shuttered properties:
Expected closures:
- Best Buy
- Big Lots
- CVS Pharmacy
- Party City
- Walgreens
Expected expansions:
- Dutch Bros
- Five Below
- Jack in the Box
- Sheetz
- Slim Chickens
- Wawa
