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Commercial Real Estate FAQ With S.L Van Der Zanden On Retail Properties & Special Servicers

Is It Not Common To See Repurposing?

The following Q&A was completed as part of our conversational Commercial Real Estate FAQ Interview Series, we hope you find it helpful:

While some types of repurposing are common, other types might have other situations that investors need to factor into the equation. For instance, it can be difficult to repurpose many big box vacation locations into distribution spaces due to the increased truck traffic in busy retail spaces. If one can find a vacant big box location not attached to a strip mall or other shopping location, this could be a more attractive idea. 

Richard Wilson: By chance, I have a client working on a repurposing of a K-Mart into a warehousing facility because of the boom in distribution. 

S.L. Van Der Zanden: Oh, sure. 

Richard: Is that really not common? Because you really need a big box, you need kind of like a Best Buy sized, or Target sized, place to go out of business that’s a little bit more rare to see it used as industrial. Just because industrial seems to be kind of a hot area right now. So, I’m just curious how often you see that coming up. 

Van Der Zanden: Yeah, I think why you don’t see more of it is more fundamental. The truck traffic part of it, the big trucks that are used and the quantity in and out, isn’t very compatible unless let’s say it’s a stand-alone Wal Mart. They didn’t have a strip shopping center around it, which is probably impossible. Just the intermixing of the two uses I think it’s difficult. 

Richard: Right, right. That makes sense.

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Richard Wilson

Richard Wilson

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