Once hailed as a hope for shopping centers and big box store owners under assault by the ecommerce boom, the conversion of retail spaces to warehouses has slowed in the face of growing local opposition.
That is the observation of Cushman & Wakefield’s Tray Anderson, who serves as the company’s Industrial & Logistics Leader, Americas.
“When we consider the bigger picture, what’s significant is retail-to-warehouse conversions make up less than one-tenth of one percent (0.073%) of the total industrial inventory and just one-tenth of one percent (0.107%) of existing logistics inventory,” he points out.
C&W competitor Prologis has estimated that retail conversions will amount to only 2.9% of annual completions over the next decade.
“Retail real estate owners and investors are taking a hard look at these assets with a focus on creative redevelopment,” Anderson says. “Potential opportunities for defunct retail centers and malls include multi-family, education, experiential retail, food halls, healthcare, concert venues and more.”
One problem, he says, is that many people believe warehouses and industrial buildings are eyesores and sources of noise, pollution and congestion.
Strategies to mitigate these impacts include limiting the hours of operation, screening truck yard lighting, and banning air braking and engine idling within a specified area. Anderson asserts that this is all it takes to quell community worry, especially when the property was previously a retail center. He also believes that electric vehicles can make a difference because they reduce noise and emissions.
Anderson says educating community residents about the reality of these facilities can be critical. “When neighbors are informed about the safety precautions developers adhere to, the environmental considerations enforced, and the economic impact these facilities create locally in both jobs and tax revenue, community concerns are eased and can result in one less barrier to conversion.”