Big box retailers leave space for the taking

Work crews demolish the former Bradlees store<br>in Somerset on Rt. 6. The store closed in 2000.
Work crews demolish the former Bradlees store
in Somerset on Rt. 6. The store closed in 2000.


On the day after Christmas in December 2000, 9,800 employees of Bradlees Stores Inc. were told that they would be losing their jobs because the Braintree, Mass.-based retailer was closing its doors forever.



Along with sending hundreds of Bay State and Ocean State residents to the unemployment line, the closure left thousands of square feet of vacant retail space throughout the region – many of the stores in busy shopping areas.



Bradlees is just one example of several retail chains, including Ames Dept. Stores, Caldor and Kmart that have caved in a tough, competitive environment and have left an airy reminder of their presence with abandoned stores.



The vacant spaces have not only been an eyesore in some cities and towns, but also created a problem of shopping deprivation for consumers and tied the hands of commercial real estate brokers. Finding a new tenant for these huge sites can be difficult for brokers who must face landlords with strict requests.



Facing demands from tenants, some landlords will not allow other retailers to move into the old space; others add specific restrictions, like prohibiting pharmacies, Laundromats or barbershops from moving into the space.



“The tighter you focus in on your market, the more difficult it becomes,” said Frank Jacques, a commercial real estate broker with Prudential Prime Commercial in Lincoln. He said it’s easier to lease space when it can be converted into other uses including restaurants or office space.



In some cases, the owners of these empty stores have been forced to divide the property because of a lack of other large retailers to take the space. In some cases, landlords have started from scratch.



On Route 6 in Somerset, the former Bradlees store – after being closed since late 2000 – is being demolished. The landlord, Stop & Shop Corp., has a store in the same plaza. The supermarket giant had purchased the Bradlees locations and has been marketing them.



Stop & Shop, which owned Bradlees until 1992 when it sold the retailer in a public offering, has jointly marketed Bradlees to other third-party retailers or end users.



The company did not return calls to discuss its plans for the space in Somerset.



Not far down the road in Swansea is Service Merchandise, another retailer that went belly up in the last few years.



Service Merchandise closed 208 stores throughout the nation. Its Swansea location, near the Swansea Mall, has been abandoned since March 2002, when the tenant closed shop.



Since then, its landlord, Chicago-based Klaff Realty LP., has been looking for a buyer to occupy the 50,000-square-foot location.



“We have other prospects – nationally recognized retail tenant groups,” said broker Brad White. White would not say how long it takes, on average, to find a buyer or new tenant because it varies from location to location, he said.



Paul Halloran, of Real Estate Group in Barrington, has been searching for a new tenant at the former Ann & Hope in Warwick for two years. The space is still owned by Ann & Hope of RI Inc.



“Big box spaces” such as Ames and Kmart are tougher to lease because there are fewer and fewer big box users, according to Halloran.



“We’ve been working with someone who is interested in the Ann & Hope in Warwick and it’s been (vacant) for two years. (The landlords) are waiting for the right price,” he said.



Halloran said sometimes the answer to selling or leasing these large retail spaces is to “reposition it and carve it up into smaller units.”



Selling a 50,000- or 60,000-square-foot location can be difficult if a prospective tenant is looking for a smaller location. If that is the case the landlord will simply split the space. “It makes it easier because it’s 25,000 square feet,” White said.



The former stores of Ann & Hope, a company founded and headquartered in Cumberland, are great examples of that kind of repositioning.



Eastern Development of Woburn, Mass., which acquired most of the Ann & Hope locations in June 2001, has redeveloped or sold off the Massachusetts and Rhode Island sites completely to other tenants such as Target or has redeveloped the sites into multi-tenant sites.



Some of the Ann & Hope locations have been converted into outlets.



Five of the locations in Cumberland, Warwick, Seekonk, Dartmouth and Millis, Mass. include CFO Fashion Outlets, Kids Outlet, Garden Outlet and Curtain and Bath. Four of the five locations include Smart Buy Outlet, an older women’s clothing store. And three of the locations include a Dollar Outlet.



Halloran said the Seekonk store has been acquired by Home Depot. David Sweetser, director of leasing for Eastern Development, added that the property at 95 Highland Ave. in Seekonk is currently under construction. Sweetser said that Home Depot’s decision on the potential use for the property is still “ongoing.”



Filling old retail space in the Ocean State is much more challenging than it is in other neighboring states, because retail business here is not as abundant as it is in other communities such as Massachusetts, Halloran added.



The landlords of the former Ames Department stores, which filed for Chapter 11 bankruptcy last year, are facing their own problems filling the seven Rhode Island locations in Cranston, East Providence, Narragansett, North Kingstown, Providence and Warren. Each location has different stipulations on what kind of tenants can move into the old Ames locations.



For example, Tedeschi, the Rockland, Mass.-based landlord for the former Cranston location stipulates that “no supermarket if a Stop & Shop lease is in effect” can occupy the 54, 260-square-foot space.



Jobel Realty Inc. of Dedham, Mass., landlord to Ames’ former East Providence location, will not allow a drugstore or a supermarket larger than 2,500 square feet to move into the 62, 867-square-foot location.



While some landlords are very restrictive on who can move in, MEGL or Finard & Company LLC, the landlord for the Warren location says “any lawful retail use” is fine by them.



Kmart Corp. is also feeling the competitive pinch.



The retailer is in the process of closing 317 of its 1,800 locations including two in the Ocean State.



Stephen Pagnani, a spokesperson for Kmart Corp., said leasing such space varies from location to location and is often based on competition in the area, consumer traffic and access from a busy road or highway.



Some industry experts say that Kmart will not have a tough time replacing its Warwick location with a new tenant because the 75, 340-square-foot space is situated on Bald Hill Road, a very active retail and high traffic location.

For the complete current issue, visit our subscription Web site, or call (401) 273-2201, ext. 227 or 234.

No posts to display