Major retailers going out of business have left massive vacant spaces in many local and national shopping centers — what’s to become of them?
The recent closures of Bed Bath & Beyond and Tuesday Morning stores have resulted in 40 large empty storefronts in the Dallas-Fort Worth area alone, according to The Dallas Morning News.
The majority of Bed Bath & Beyond stores are around 30,000 square feet. Most of Tuesday Morning’s stores are in the 7,000-square-foot range.
Bed Bath & Beyond had managed to escape bankruptcy at the start of this year by securing a $1 billion capital raise in an effort to revive the business, including a $100 million additional credit line from one of its lenders in exchange for convertible stock and warrants, as The Dallas Express reported.
Yet in the end, Bed Bath & Beyond and Tuesday Morning ended up filing for Chapter 11 bankruptcy proceedings and began closing stores in May, as The Dallas Express reported.
Industry experts believe that the vacant spaces where these retailers once conducted business in DFW will not remain empty for long, according to the DMN.
“There’s a tremendous need for second-generation retail space, a box that’s already finished out with good air conditioning and bathrooms that can be backfilled quickly,” explained Jill Tiernan, who is the executive vice president of The Retail Connection, a commercial realtor, according to the DMN.
This is especially true of Bed Bath & Beyond leases, as Tiernan said the company was known for negotiating below-market rents in prime locations.
For instance, Bed Bath & Beyond had a 50,000-square-foot facility in Caruth Plaza which used to be one of the retailer’s highest-volume stores. Another location likely to draw high interest is located on Park Lane, not far from NorthPark Center in Dallas.
Leases for these companies’ now-closed storefronts are currently up for grabs and can be assumed by new tenants.
Numerous businesses are eager to snatch up this prime shopping center space, including major retailers such as Macy’s, The Container Store, HomeGoods, and Total Wine & More.
A former Tuesday Morning location at the Hulen Fashion Center in Fort Worth already has a potential lessee, Mike Geisler, a managing partner of Venture Commercial, told the DMN.
High demand for these leases is also expected amid a shortage of retail space, with new construction in DFW being limited to only a few areas.
As The Dallas Express has extensively covered, new construction projects in Dallas are notoriously difficult to get off the ground due to the City’s heavily delayed permitting process.
This lack of new commercial properties in the works isn’t expected to change anytime soon, as Bob Young, executive managing director at Weitzman, predicted.
“I’m an optimist, but I don’t see new construction in 2023. If anything comes along, it will be mid-2024 at the earliest,” Young said, citing high construction and financing costs, according to the DMN.
Contrary to a huge slump seen in office occupancy rates in DFW, as The Dallas Express has covered, the area’s retail occupancy rates hit a historic high of 94% last year, according to the DMN.
