Empty big-box retail stores a growing problem (or opportunity) for suburban Detroit

Reprinted from www.freep.com

Empty big-box retail stores a growing problem (or opportunity) for suburban Detroit

Empty retail stores are on the rise in some cities. So are creative solutions to filling them. Wochit

For clues to what may happen to all those empty big-box stores and ailing shopping centers in suburban Detroit where people once swarmed, look to the shopping district around Westland’s namesake mall.

When retailers such as Value City, Circuit City, Service Merchandise and Macy’s at Westland Shopping Center closed, they left behind large and vacant store buildings, a type of retail space that has gotten challenging to fill amid the explosive growth of online shopping and consumers’ changing shopping habits.

A few of these shuttered stores were eventually refilled with new stores. Others were transformed to house businesses that aren’t retail. Some still sit vacant, and one big box was torn down.

While Westland has seen a particular abundance of large store closings, retail and development, experts say that suburbs across the region have become over-saturated with stores as more shopping moves online and traditional retailers downsize.

There is general agreement that southeast Michigan now has more empty big-box and midsize box stores than retail tenants to fill the space.

“There’s going to continue to be closures, without a doubt, because we’re over-stored,” said Frank Monaghan, president of Monaghan & Company, a commercial retail brokerage. “There are a lot of areas in the Detroit area where I don’t see retail occupying these buildings ever again.”

Struggling retailers like Kmart, Sears and JC Penney — all known for big stores — have been closing dozens or even hundreds of locations a year. And there is no indication this will stop. That means more Michigan cities will be dealing with empty retail boxes and their negative effects on nearby shopping centers.

“It’s not only in Michigan, it’s nationwide,” said Ron Goldstone, senior vice president at NAI Farbman, the Southfield-based real estate firm.

Read the full article here.

New life for long vacant department store gem

xtraNewark

Reprinted from Shopping Centers Today 

For three decades the once-grand former department store stood empty. But a team of developers has restored and converted the 400,000-square-foot Hahne & Co. building, in downtown Newark, N.J., into a mixed-use project with the city’s first Whole Foods store and 75,000 additional square feet for retail.

The renovated building also features an arts-and-culture center operated by Rutgers University–Newark, plus 160 new apartments — 64 of which are set aside for low-income and working families. The new homes are located on the third and fourth floors of the existing building and also in a new, nine-story residential building on the corner of New and Halsey streets, which will connect to the Hahne building through a shared lobby and public atrium. Chef and restaurateur Marcus Samuelsson has plans to open a 2,250-square-foot restaurant in another part of the building.

The Hahne & Co. department store was designed by Goldwin Starrett and built by local businessman Julius Hahne in 1901. It was the first commercial building in Newark designed specifically as a department store. The art-deco store was the company’s flagship and boasted a spectacular four-story atrium in the center of the building. In 1987 Hahne was sold to May Department Stores Co., owner of Lord & Taylor, and the building has remained vacant since then.

The building was listed on the National Register of Historic Places in 1994. The restoration preserved key elements of the structure, including the facade, the original signage and the expansive skylight. This skylight was dismantled, fully restored and reinstalled in the new retail arcade as a nod to the department store’s dramatic former shopping atrium.

The $174 million renovation was financed through a partnership of public, nonprofit and private groups, including sizable commitments from the New Jersey Housing and Mortgage Finance Agency and the New Jersey Economic Development Authority. Private equity was provided by L&M Development Partners, Prudential and Goldman Sachs, and debt was provided by Citi Community Capital, Morgan Stanley and three nonprofit community development financial institutions: New Jersey Community Capital, the Low-Income Investment Fund and The Reinvestment Fund. Beyer Blinder Belle, a New York City firm specializing in historic preservation, was lead architect. New Jersey–based Inglese Architecture & Engineering provided architecture, mechanical, electrical, plumbing and construction administration services.

Read the full article here

As department stores exit, mall makeovers begin

Reprinted from The Chicago Tribune

mall-makeover-redevelopment“Everybody’s going to take a step back and re-evaluate how these spaces should be used,” says Alden Loury, director of research and evaluation for the Chicago-based Metropolitan Planning Council, which has examined the financial and social impact that mall retail vacancies have on mostly black communities.

Illinois has about 60 major malls, the majority in the Chicago area, and seven outlet malls that collectively house over 6,000 stores, according to Mallsinfo.com, which tracks the industry. However, a significant number probably won’t survive the seismic retail store shake-up that’s underway.

Nationally, an estimated 300 malls — about a third of the total number — are expected to close over the next 10 years, according to industry research. That’s a conservative estimate that likely will accelerate as digital buying increases and inflicts greater pain on the bottom lines of bricks-and-mortar retailers, experts add.

It’s no huge surprise that malls catering to upscale shoppers in more well-heeled communities have a better chance of surviving the loss of a major tenant or shakeout. If a mall can replace a Macy’s with a Von Maur, a high-end department store, it’s a manageable adjustment.

Moreover, retail mall developers are trying to re-energize these open spaces by luring more restaurants, gyms or entertainment venues. For instance, since 2011 the locally based General Growth Properties has invested nearly $1.5 billion nationwide to freshen up 91 vacant or near-vacant department stores and mall spaces.

Read the full article here: http://www.chicagotribune.com/business/columnists/ct-mall-makeovers-robert-reed-112-biz-20170111-column.html

 

 

Fall Of The Mall? How Mergers And Millennials Are Changing An American Icon

Reprinted from www.forbes.com

In Dearborn, Michigan, Lord & Taylor has been tailored for Ford.

The Fairlane Town Center in suburban Detroit is retrofitting the former department store space and several other vacancies to accommodate offices for Ford Motor F +1.32% Co. The automaker will move 2,100 workers to the mall as it converts 240,000 square feet of former retail space into a product-planning center.

If it sounds unconventional, that’s the point. “Most major malls are overbuilt, meaning they can’t support the square footage they have allocated to retail,” retail analyst Jeff Green toldMichigan Live for a story about the project. “Which is why they’re starting to look at nonretail uses being brought on the mall site.”

True enough, Fairlane is one of many malls across the country signing on non-traditional, high-traffic tenants as mall vacancies rise. Retail mergers and consolidations have resulted in fewer traditional department store anchor options. And younger consumers, accustomed to round-the-clock digital stimulation, are more likely to find the standard mall, with its cavernous walkways and recurring terrain of familiar shop windows, boring.

Fairlane is one of many malls across the country signing on non-traditional, high-traffic tenants. Photo credit: Fairlane Town Center

Roughly 200 U.S. malls are at risk of shuttering in the coming several years, according to Green Street Advisors. The analytics firm also estimates retailers will need to close about 800 locations, or a fifth of total mall anchor spaces, in order to achieve sales productivity of the mid-2000s.

That’s a lot of wide-open retail space. The risk for mall operators is falling for seemingly sexy new tenants that may not have the staying power of experienced retailers that better understand their market bases. Experienced retailers such as Apple AAPL -0.67%, which has installed glass staircases and Edwardian decor to complement the locales of its many locations. Or custom menswear chain Alton Lane, which serves cocktails and conversation to better understand its customers.

Which leads to the question: If today’s major mall can serve as a planning center for a major automobile manufacturer, what will the mall of tomorrow hold? One hint: To survive, it must serve the shopper’s desire to connect and preserve the shared, relationship-based shopping experiences people long for.

Read the full article here .

For Charleston, vacant buildings present big challenges

Reprinted from Charleston Gazette-Mail

Charleston property maintenance inspectors Ron Coon and Cheryl Gaynor discuss upkeep issues outside a Hunt Avenue home that’s been vacant for years. Because the deceased owner didn’t name an heir to the property, the Building Commission doesn’t have the authority to demolish it, Coon said.

Charleston property maintenance
inspector Ron Coon discusses the
demolition of the former Capital Paging
building on Kanawha Boulevard. The
historic building had been vacant for
several years and was occupied by
vagrants at the time the fire was set. The
fire is being treated as an arson, though
no arrests have been made.

Crews work to salvage any scrap metal that can be recycled from a demolished home on Burlew Avenue. The house collapsed over the winter, but the Building Commission couldn’t raze the structure until it got consent from the owner. If derelict properties were a disease, much of Charleston would be quarantined.

Charleston’s Building Commission is finally enforcing an ordinance, passed by City Council in 2014, which addresses the vacant buildings peppered throughout the city.

The law requires owners of empty structures to register them with the Commission. The office has since compiled a database of nearly 500 properties around the city.

Vacant building registries are catching on in the Mountain State as a way cities can keep tabs on unoccupied buildings before they fall victim to vandalism, vagrancy and arson.

But the Charleston Building Commission still faces numerous problems in applying the law.

From deceased owners to demolition restrictions and fickle tax-sale investors, it’s unclear whether the vacant structures ordinance has the teeth to make a long-term impact.

A common scene

On a muggy April afternoon, Ron Coon, an inspector with the Building Commission, drives through neighborhoods with the most abandoned homes in the city.

The majority of shuttered properties are residential and lie in wards 1 through 4.

“The worst parts aren’t in the flats — they’re in the hills,” he says.

Coon stops his car in front of an empty home in the 1000 block of Hunt Avenue in Ward 3.

Weeds and thistles choke the front yard where a weather-worn post sits without a mailbox. Vines wind up the front steps to a trash-scattered porch.

The front door and windows are covered with plywood. Someone hastily spray-painted the house number onto its exterior.

But the home’s foundation, Coon says, is solid.

The owner died a couple of years ago and didn’t leave the home to any heirs.

“Eventually, the county will sell it for taxes,” he says.

“Looking at the outside, it’s probably a rehabable structure right now. In another half-dozen years, it probably won’t be.”

The story is all too familiar for the Building Commission.

When a homeowner dies and doesn’t name any heirs to their property, the commission is powerless — and the ordinance is futile.

The objective

When a building remains vacant after one year on the registry, the commission charges the owner a $250 fee.

The fine increases by $250 for each year the structure stays on the registry. If the owner’s balance reaches $1,000, the commission may file a lien on the property.

Since November, the city collector’s office has received $4,750, or 19 payments, from more than 250 fines it sent to property owners.

The system is meant to encourage owners of blighted properties to sell, demolish or renovate them, Building Commissioner Tony Harmon said.

“We’re trying to get it to where the public can access the list. There’s a good possibility that someone could find a property they’re interested in,” he said.

From 2006 to 2015, the building commission demolished 463 residences and 109 commercial structures.

With the registry now in place, Harmon hopes to see up to 100 buildings removed from the list annually.

The Mayor’s Office of Economic and Community Development allots funds to the Building Commission for demolitions, but Harmon must ask for additional money each year.

A recent budget amendment added $20,000 more to the demolition fund for a total of $210,000 assigned this year, said Brian King, the office’s director.

Several exemptions exist under the ordinance, such as a building that’s being actively marketed, is government owned or is at least 15 percent occupied.

Read the full story here: http://www.wvgazettemail.com/news/20160509/for-charleston-vacant-buildings-present-big-challenges-interactive-map#sthash.UFFY2d0I.dpuf

What to Do With Birmingham’s Surplus Schools?

Reprinted WBHM 90.3 FM

Michael Calvert from the Alabama Trust for Historic Preservation climbs the steps in front of the old Powell School. He inserts a key into the lock and removes a rusty chain from the door. Vacant for almost 15 years, Powell feels frozen in time. Calvert takes a look around. “So this is the building,” he says.

“We can step into one of these classrooms and you’ll get a notion of the appearance.” The walls are cracked and peeling, lined with old murals and bulletin boards. The rooms are covered in debris, leftover from a fire in 2011 that destroyed much of the roof and upper floors.

Vacant schools like Powell are a common sight throughout Birmingham. The buildings symbolize decades of population decline and budget cuts. Now, as the city center grows, many hope these large structures will be revitalized.

The Powell School in 1908.

Alabama Trust for Historic Preservation

The Powell School in 1908.

Blighted History

Powell was Birmingham’s first and oldest public school, built in 1888. It is located on the Northside of downtown, overlooking the recently built Park Place Condominiums. Calvert says the building is an important part of the city’s history.

Read the full article here https://news.wbhm.org/feature/2016/what-to-do-with-birminghams-surplus-schools/

Commercial Asset Preservation, LLC. Expands Services to Canada

CAP serves occupied and vacant commercial retail, office, industrial, warehouse and institutional buildings

Salt Lake City, UT, USA, May 16, 2016 – Commercial Asset Preservation, LLC (“CAP”), a US nationwide provider of maintenance, repair, day porter and inspection services expands service into Canada. CAP provides its services at occupied, partially occupied and vacant commercial real estate, CAP is headquartered in Salt Lake City, Utah.

Since 2009, CAP’s independent contractor network, comprised of commercial general contractors and licensed trade professionals, has been strategically located throughout the entire United States. Now CAP is bringing its maintenance, repair, day porter and inspection service offerings into the Canadian market using locally based Canadian contractors.

“We’re very excited to take our services north,” comments Marc Insul, President and COO of CAP. “Our clients have been asking about Canada. We developed a similar network of independent contractors that are experts in commercial real estate maintenance and are familiar with local property rules and regulations. Our Utah-based service center will continue to provide coordination and management for all clients in both the United States and Canada. With the addition of Canada, we are now North America’s premier commercial general contractor.”

For more information, visit www.commercialpreservation.com or contact inquiries@commercialpreservation.com.

About Commercial Asset Preservation, LLC

Commercial Asset Preservation, LLC, (“CAP”) is a service provider established in 2009 to manage a national network of independent contractors offering property inspection, day porter, repair, maintenance, and preservation services to holders of abandoned and nearly vacant retail, office, warehouse, industrial and institutional (altogether “commercial”) real estate. CAP has since evolved into a full scale commercial facilities maintenance and inspection service provider handling both occupied and vacant properties.

Developers Are Turning Rust Belt Hulks into Luxury Hotels

Reprinted from National Real Estate Investor

(Bloomberg)—Covington, Ky., a city of 40,000 across the Ohio River from Cincinnati, seems like an odd place for a high-end hotel. For Mario Tricoci, that’s a selling point.

Last year, the Chicago developer hooked up with a local real estate investor on a $22 million retrofit of a century-old, seven-story, defunct Covington department store that locals say was the first skyscraper in Kentucky made of reinforced concrete.

Tricoci, chief executive officer of Aparium Hotel Group, is in the middle of a small-market spree that started with the conversions of a Milwaukee warehouse in 2013 and a La Crosse, Wisc., chocolate factory in 2015. Aparium has hotels taking shape in a former warehouse for tractors and other farm equipment in Minneapolis, an old fire department headquarters in Detroit, and an obsolete bottling plant for Pabst Brewing in Kansas City. By the time he’s done, Tricoci said, the company could be operating 20 hotels, or more, with a focus on small cities that are nonetheless big enough to have a pro sports team.

The idea is to grab hold of two dovetailing trends: consumers shying away from branded offerings and investors putting money into smaller U.S. cities, encouraged by local economic development types and a diverse set of national cheerleaders. They include AOL co-founder Steve Case, who has been banging the drum for technology startups in minor markets, and commercial real estate firms touting “18-hour cities” on the theory that traditional markets such as New York and San Francisco have become too expensive.

“Coming out of the recession, it felt like a safer environment to play in,” said Tricoci, 44, whose previous company built the Elysian Hotel in Chicago, a five-star offering that opened in 2009 and was later rebranded as a Waldorf Astoria.

While the room rates are cheaper—Tricoci estimates that a $200 suite at his Charmant Hotel in La Crosse would go for $700 a night in New York—the dearth of competition has helped keep Aparium’s early properties busy.

“Every one of these markets has wealthy people who eat and drink and spend money,” he said. “They have major businesses with spending accounts and stipends.”

Aparium isn’t the first hotel operator lured to the rehab business by the prospect of cheap buildings with good bones. The Ritz-Carlton Philadelphia sits in a domed Beaux Arts building that was put up as a bank headquarters. The Renaissance Pittsburgh Hotel, a Marriott property, occupies a 1906 building commissioned by Henry Phipps, a partner in Carnegie Steel. Kimpton Hotels has a line, called Hotel Monaco, dedicated to the adaptive reuse of historic buildings. Drury Hotels has put beds in an old fur-trading building in St. Louis and a former education department building in Cleveland.

Read the full story at here.

 

 

America’s abandoned factories in hot demand

Reprinted from money.cnn.com

There’s a love affair happening with an unlikely type of real estate: America’s empty factories and warehouses.

americas-demand-for-abandoned-propertiesVacant commercial spaces are in high demand as both startups and multinationals look for facilities to house their U.S. operations.

Several factors are driving this trend, according to Stuart Lichter, president of Industrial Reality Group, one of the largest owners of U.S. commercial real estate.

Many U.S. companies, which had moved their operations overseas to keep costs down, are coming back home to be closer to their customers. On the flip side, foreign companies are also shifting some production to the U.S. to be more competitive and grow their U.S. market.

Meanwhile, some industries that were hit hard by the recession have recovered and are growing.

“Just a few years ago there were many defunct industrial spaces in Detroit,” Lichter said. “A bulk of those are gone as the auto industry recovered.”

Here’s a look at how once abandoned factories and commercial buildings are getting a makeover:

Read the full story at http://money.cnn.com/2016/03/08/smallbusiness/factories-plants-manufacturing/index.html

Tree Project Could Restore Chicago Old Wilson School Site

Reprinted from Battle Creek Enquirer- Part of the USA Today Network

Years after the closure and ultimate demolition of Wilson Academy, a Chicago-based startup’s idea could put the vacant property back to use.

Fresh Coast Capital’s plan is to plant more than two acres at the site of the former school with rows of hybrid poplar trees. Part of the property is owned by the city of Battle Creek, which entered in a management agreement with the company after the City Commission unanimously approved it Dec. 15.

The rest is owned by Battle Creek Public Schools. Fresh Coast Capital has spoken with district officials, who will present the project to the Board of Education this month for a potential vote.

“We have a large land mass in our geographic area,” Battle Creek Planning Manager Christine Zuzga said last month. “We’re going to be faced with challenges in trying to reuse other types of property. There’s a lot of investments in demolitions of blighted properties, but then we want to be able to find a reuse of those.”

Five years after the trees are planted, half of them will be harvested and used for biofuel, according to a city staff memo. The rest will be cut down to sell about 10 years later, when they reach up to 60 feet in height. Both are ways Fresh Coast Capital makes a return on its investment.

Then, the trees can be regrown and kept as a permanent green space, or the property can be used in another way.

But it’s more than a farm, with the trees growing in a park-like setting and without a fenced-in area so it can be enjoyed by the community. It’s also a project that provides health benefits and environmental perks, said April Mendez, Fresh Coast Capital’s co-founder and director of community partnerships.

Read the full story here http://www.battlecreekenquirer.com/story/news/local/2016/01/04/tree-project-could-restore-old-wilson-school-site/77413128/?from=global&sessionKey=&autologin