Retailers Nationwide Eye Vacant Space As Growth Opportunity

Retailers across the U.S. are eyeing vacant storefronts as an opportunity for growth as numerous national brands make plans for new brick-and-mortar locations, CNBC reported on Thursday (March 18).

Bigger retailers, as well as entrepreneurs, have been looking for deals as commercial rents continue dropping along with COVID-19 infections. Adding to the uptick is the growing distribution of vaccinations.

U.S. merchants have announced 3,199 store openings and 2,548 closures, according to Coresight Research, per CNBC. Last year, 8,953 retail addresses shuttered, and only 3,298 new stores launched in expanded locations.

In 2019, retailers announced 4,548 openings, compared to 3,747 in 2018, Coresight said. So far in 2021, openings are already tracking to surpass each year prior, according to the research. Store closures reached new levels last year, with the real estate industry for commercial rentals overflowing with vacancies.

Retailers have shown an appetite for increasing the presence of stronger brands in physical stores as well as exploring different concepts that could result in an expanded customer base.

By way of example, sportswear merchant Fabletics said it was planning to open 24 new U.S. retail locations in 2021. Toys R Us, which ended up liquidating, is now seeking a buyer and is hoping to reopen locations before the 2021 holiday shopping season.

Rental prices for retail space have dropped significantly this year from New York to California. The Real Estate Board of New York reported that the median Manhattan retail asking price for rent fell in all 17 retail corridors during the fall of 2020. The board added that eight of 17 retail corridors are “experiencing their lowest price per square foot averages in at least a decade.”

Applications to open new businesses escalated during January 2021, with Commerce Department data showing a 42.6 percent uptick to 492,133. By comparison, there were 4.3 million applications for new businesses filed with the Census Bureau in 2020 versus 3.5 million the year prior.

Commercial properties in the country saw valuations plummet beyond 25 percent as the pandemic wreaked havoc on hotels, malls, and many noncommercial buildings.