As retail struggles throughout the pandemic, there are many arguments for converting slumping shopping centers into new uses.
Big box retail hasn't suffered as much as mom-and-pop stores, gyms and restaurants. Still, investors and developers are looking to warehouse conversions as a way to take advantage of the higher returns and strong rental growth of the logistics sector, according to Stuart Taylor, senior director of retail investments for JLL in a new post.
The case for these conversions is straightforward: In the US, there is an oversupply of retail buildings and many defunct malls have already been converted to industrial uses. For example, the Randall Park and Euclid Square Malls in Ohio have been converted into fulfillment facilities by Seefried Industrial Properties, resulting in a 20% increase in lettable area across the assets, according to JLL.
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Leslie Shaver
Les Shaver has been covering commercial and residential real estate for almost 20 years. His work has appeared in Multifamily Executive, Builder, units, Arlington Magazine in addition to GlobeSt.com and Real Estate Forum.
