Mom and Pop Retailers the New Darling for Landlords in South Fla.—and Beyond
The end of the traditional big-box era is creating a new landscape where mom and pop retailers are the new credit tenants for South Florida mall and strip center landlords who have to re-invent the large spaces vacated by Sears, Toys R Us and others like them.
March 07, 2019 at 09:55 AM
4 minute read
The end of the traditional big-box era is creating a new landscape where mom and pop retailers are the new credit tenants for South Florida mall and strip center landlords who have to re-invent the large spaces vacated by Sears, Toys R Us and others like them.
When looking deeper at the macro-economic drivers impacting the sector: the high-profile big-box bankruptcies, proliferation of e-commerce and increasing emphasis on “experiential retail,” the next generation of retail is one of opportunity—not an apocalypse as many have suggested. Savvy investors understand this, as there is no shortage of interest in acquiring tri-county area retail centers that include vacated big-box space.
With so much focus on the closure of big-box stores like Sears and Toys R Us, the opportunity for landlords to recapture these spaces and repurpose them to higher and better uses has been largely overlooked. REITs particularly stand to benefit from being extricated from long-term, golden handcuff leases to big-box tenants at dirt cheap rents. Many of the Sears stores were still operating on original 50 or even 99-year leases with pre-negotiated annual increases, as opposed to market-rate resets.
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