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October 5, 2009

The ‘Vacancy’ Blight: Finding New Uses for Empty Stores

From art galleries to health clinics, new uses are being considered for unoccupied space. Empty spaces are literally leaving gaps within communities and property owners must rethink who “ideal” tenants are.

From Time | The ‘Vacancy’ Blight: Finding New Uses for Empty Stores

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Last spring, Manon Slome was walking down a street in New York City when she noticed something odd: “Store after store was closed. When stores are empty it’s like, ‘What’s going on?’ It was a feeling of siege.”

Plenty of people in America could make the same observation. Nationwide, 10% of shopping center stores sit empty, according to the real-estate analytics firm Reis. That’s the highest percentage of vacancies since 1992 — what you get when you mix a bad recession with a commercial real estate bust (thanks to years of overzealous building).

Slome is now among the people doing something about it. After her springtime walk, the museum curator started contacting building owners, suggesting they let her use their empty space for art exhibitions. She landed her first storefront in June: a former tackle shop was soon home to photographs, paintings and videos on the bad economy and — in homage to the space’s former use — fishing. Says Slome: “It’s art coming in to fill the vacuum.”

The repurposing doesn’t stop there. Around the country, property owners and managers are trying out new uses for empty stores. Spaces that used to house Radio Shacks and Linens ‘N Things now serve as libraries, auction houses, TV studios, even block-long billboards to advertise other stores and brands.

Such endeavors are not going to solve the retail real estate glut. Only a realignment of supply and demand for long-term leases will do that. But in the short-term, getting creative with commercial space keeps storefronts filled, which helps keep properties secure and community spirit intact, and may even bring in a little money for would-be landlords to offset costs like utilities, taxes and maintenance.

Consider the work of Marc Feldman at Developers Diversified Realty, an Ohio-based company that owns nearly 700 retail properties across the country. He and his 15-person team are charged with finding non-traditional uses for available spaces at a time when some 9% of the firm’s units sit idle. Among the temporary uses they’ve landed on: health clinic, campaign office, auction house, county library, swap meet and soundstage for a car commercial shoot. “It doesn’t make up for the rents those retailers were paying, but it definitely provides revenue that we wouldn’t otherwise have,” says Feldman. “Even if it’s just for a day or a week, it goes to the bottom line.”

Steve Birnhak has another idea: turning empty storefronts into billboards. The company he founded, New York-based Inwindow Outdoor, connects property owners with advertisers willing to pay for window space, conveniently located right at the eyelevel of anyone walking or driving by. The ads go from floor to ceiling and are pretty hard to miss. One recent Chicago project advertised Intel over the entire facade of a now-defunct Comp USA store.

Cities are getting in on the act, too. At the end of October, San Francisco will launch Art in Storefronts, a collaboration between the Office of Economic and Workforce Development and the San Francisco Arts Commission that will fill 20 unused storefronts in four neighborhoods with the work of local artists. The goal is twofold: to spruce up areas that have seen high vacancy rates and to help support artists in a down economy.

There may eventually be another benefit, too, says Lisa Pagan, who runs San Francisco’s business improvement districts program. “The hope is that this may help people look at individual storefronts in a more positive way,” she says. Translation: get enough art lovers to traipse up and down a certain block and maybe some of them will start thinking about what a great place it would be to rent a storefront for their business.

Full | The ‘Vacancy’ Blight: Finding New Uses for Empty Stores

Yahya E. B. Henry

About Yahya E. B. Henry

Merging his passion for cities, real estate, tech and travel, Yahya is introducing the world to a new model of real estate development that draws from best practices around the globe.

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6 Comments

  • This is a neat concept…particularly the art exhibits. This could still bring money back into the community through support of local artists. I'm wondering if bringing positive attention to these empty stores brings potential retailers interested in renting these spaces? Any data on this?

  • I haven't seen any data on that potential. I agree that these vacancies create a unique opportunity to recapture space at the community level that. It will take models like Ava Bromberg's (@spacemaking) and others to create and demonstrate what can be accomplished when properties are owned/managed by community stakeholders.

  • This is very interesting. It is good that the owners are able to make some type of revenue on their empty space.

  • I'm not certain they have much of a choice. If they wish to see any income on these properties, an element of flexibility needs to exist and/or be created. Property owners will have reconsider who they envision ideal tenants to be; that's a great thing, at least at the community level.

  • This is very interesting. It is good that the owners are able to make some type of revenue on their empty space.

  • I'm not certain they have much of a choice. If they wish to see any income on these properties, an element of flexibility needs to exist and/or be created. Property owners will have reconsider who they envision ideal tenants to be; that's a great thing, at least at the community level.

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