The amount of available retail anchor space hit an all-time high of 12.3 million square feet in the Chicago area, up from 10.8 million last year.
Thanks to retail bankruptcies and store closings among chains including Toys “R” Us, the amount of vacant anchor space has jumped 50 percent in just the past two years, according to a report in CBRE, according to Crain’s.
An analyst said the problem can extend beyond a vacant anchor space, as smaller stores in malls depend on the bigger neighbors to bring in foot traffic.
“When their leases come up for renewal, some of those tenants may choose not to renew,” Morningstar real estate debt analyst Edward Dittmer told Crain’s. “When you start to see in-line tenants leave that part of the mall, it’s hard to recover from that.”
Some landlords have been able to fill the vacant anchor spaces. Chicago-based shopping mall owner GGP signed up Life Time Fitness, Land’s End, L.L. Bean, Ballard Designs and KidZania, a children’s entertainment concept, to take over most of a three-story, 250,000-square-foot Sears store at Oakbrook Center in suburban Oak Brook.
Discount fashion chains like Ross and Marshall’s have leased more anchor space here than any other tenant category, according to CBRE. Fitness and entertainment tenants also have been popular with landlords, partly because they’re not vulnerable to the e-commerce threat.
The problems for mall owners are part of a bigger issue in the retail sector, where vacancies in general rose last quarter as brick-and-mortar locations continue to struggle with the effects of growing ecommerce.
[Crain’s] — John O’Brien