The Shifting Retail Landscape: What Big Lots’ Closures Mean for Commercial Real Estate Investors
The Shifting Retail Landscape: What Big Lots’ Closures Mean for Commercial Real Estate Investors
The retail world is shifting once again, and this time it’s Big Lots making headlines. As reported in a recent press release, Big Lots announced the closure of its remaining stores, marking a significant moment in the evolution of retail real estate. This follows a broader trend we’ve been watching closely: the ongoing shakeup of brick-and-mortar retail as consumer behaviors shift and economic pressures weigh on traditional retailers.
Big Lots’ closure isn’t just a story about one retailer—it’s a signal to commercial real estate (CRE) investors and property owners about the need to stay ahead of market trends. CBRE’s recent commentary highlights how these closures are reshaping opportunities in retail CRE, creating both challenges and avenues for reinvention.
What Does This Mean for Investors?
Retail closures like these are reminders that no asset class is immune to change. Big Lots’ closures, along with similar announcements from other mid-tier retailers, suggest that underperforming spaces in secondary or tertiary markets are increasingly at risk. However, while retail vacancies can be concerning, they also create opportunities for strategic repositioning. Here’s what savvy investors should consider:
1. Reevaluating Property Strategies:
As large retail spaces go dark, this can depress nearby property values—but it also creates opportunities for adaptive reuse. Properties previously occupied by big-box stores can often be repositioned for alternative uses like medical offices, last-mile logistics, or even mixed-use developments.
2. Shifting Tenant Expectations:
While legacy retailers may be struggling, demand from experiential tenants—gyms, entertainment hubs, and boutique retailers—continues to rise. Investors and landlords should focus on curating tenant mixes that reflect modern consumer preferences.
3. Location Still Matters:
Not all retail properties are created equal. Proximity to strong residential growth areas or integration with mixed-use developments can safeguard retail assets from the kind of struggles Big Lots and other brands are facing.
4. Opportunities in Distressed Assets:
The current market shift is creating an uptick in distressed retail properties coming to market. These can be ripe for repositioning, provided investors do their due diligence and focus on properties with long-term potential.
A Broader Trend in CRE
What we’re seeing isn’t an isolated event. It’s part of a larger narrative in the CRE world, especially for those investing in retail properties. Retail has been steadily shifting toward a more service-oriented model, emphasizing experiences and convenience over traditional product offerings. As CBRE notes in its market insights, retail’s future will hinge on landlords and investors being proactive in addressing tenant needs and adapting properties to new uses.
Takeaways for Local Investors
For those of us in the North and South Carolina markets, this news underscores the importance of staying vigilant. While closures like Big Lots’ may seem like bad news on the surface, they also offer opportunities to reimagine the future of retail properties. The Carolinas, with their steady population growth and vibrant economic landscape, remain fertile ground for repositioning and reinvesting in retail assets.
If you’re holding retail properties in your portfolio—or considering adding some—now is the time to ask the hard questions. Is your property future-proof? Does it align with where the market is headed? Are there opportunities to pivot toward a tenant mix that aligns with today’s consumer demands?
How Ardor Can Help
At Ardor, we specialize in helping investors navigate uncertain times like these. Whether it’s identifying distressed assets worth acquiring, repositioning existing properties for higher ROI, or crafting strategies to attract strong tenants, our goal is to help you see the big picture while staying agile in a dynamic market.
The retail landscape is evolving—fast. The question is: Are you ready to evolve with it?
Let’s connect to discuss how this shift could impact your portfolio and the steps we can take to ensure your investments remain resilient. Reach out today, and let’s build a strategy that positions your assets for long-term success.
Sources:
• Big Lots Press Release: PR Newswire
• CBRE Retail Insights: CBRE
