Today's Commercial Real Estate Challenge: How to Fill that Big Box Vacant Space

The global recession, decline in consumer spending and international trade have contributed to a number of big box retailers closing their doors in the last 18 months. Joining the ranks of Circuit City, companies like Linens 'N Things, Shoe Pavilion, Mervyns and Tweeter have been shuttering their doors for the better part of a year. Other national retailers, like coffee-powerhouse Starbucks, are scaling back their U.S. chains to conserve cash.
While just a small percentage of the overall commercial real estate vacant space, property owners are finding it difficult to fill big box retail space. With few new chains stepping forward and thriving to expansion level in today's economy, owners must get creative to fill that space.
Where short-term tenants (like discount bookstores) bring in some income, they will not sustain the overall space's rent for very long. And subdividing a large retail location into smaller spaces may make sense today, but how will that impact the property's value when the commercial real estate market recovers?
Unfortunately, there is no clear cut solution. While leasing out a vacant Circuit City location to a political campaign office in the short term may work in one market, it may not be supported in another. Property owners need to look at the industry's history to find that these vacancies and the current market uncertainty will lead to the birth of new retailers in the future, much like Target and Walmart quickly overtook the market after the loss of Bradlees, Caldor and the pullback of Kmart.
The true challenge is finding a way to make the space profitable in the meantime.