Worcester Business Journal

10 Worcester Business Journal | April 2, 2018 | wbjournal.com Toys "R" Us closures are another wave in commercial real estate's evolving retail offerings Finding the next BY GRANT WELKER Worcester Business Journal News Editor BIG BOX F or as long as retail plazas have dotted area roadsides, there has been turnover in the names that adorn shopping centers. The days of Bradlees and Caldor led to Sports Authority and Circuit City, and today closures are bringing new tenants yet again. Except these days, there aren't nearly as many chains to take their place. The quickly changing retail landscape took a new hit with the closure of a Sam's Club in Worcester in January and the impending closure of Toys "R" Us in Auburn, Leominster, Northborough, Millbury and Framingham. That leaves shopping-plaza landlords looking for new tenants again, and they're more likely today to be discount retailers, fitness centers, entertainment uses or even offices. "It's a very, very difficult undertak- ing" to find new uses for vacant big-box stores, said Donald Bouchard, senior vice president and co-head of the valua- tion and consulting services at Boston- based Lincoln Property Company. "There's a different focus now for this generation," Bouchard said of younger shoppers, particularly Millennials, who are more likely to spend their money on food or entertainment than on tradi- tional retail. "To get someone into a shopping center today requires more and more of the experiential issue. You're not just going there to buy stuff." Health care, entertainment & exercise Already, some former large retail spaces are being converted to less-tradi- tional uses in Central Massachusetts. At the Auburn Mall, the former two- story Macy's home goods store – previ- ously a Caldor – is being converted into offices for Worcester-based Reliant Medical Group, a restaurant and small retail space. Reliant has also moved into the former Linens 'n Things at Bay State Commons in Westborough. At the Natick Mall, the upper floor of a two- story Sears is planned to become a Dave & Buster's bar and arcade location. Vacancies have created new opportu- nities for chains to move into spaces left over from defunct or shrinking retailers. Burlington Coat Factory has moved into a former Circuit City in Leominster and a former Bradlees in Worcester. Ocean State Job Lot filled a former Linens 'n Things in Leominster and an Ames in Sturbridge. Big Lots has taken former Rich's department stores in Gardner and Fitchburg. Planet Fitness has also taken advan- tage of space left over by others. Brian Kalibik, the president and CEO of a franchisee company owning Planet Fitness locations in Worcester, Marlborough, Shrewsbury, Franklin and elsewhere, said he's watched the Toys "R" Us struggles closely, anticipating potential new gym locations. "When there was a big economic downturn and we saw a lot of retailers go under, for us, we were uniquely posi- tioned because our business model is so resilient during an economic down- turn," Kalibik said. Struggles in the industry are sad, he acknowledged, "but for us, it's just a beautiful opportunity for us to grow." It has even spurred Planet Fitness to change its gym layouts, Kalibik said. Stores were typically 10,000 to 15,000 square feet years ago, but they now are more likely to be 20,000 or even close to 30,000 square feet in order to fit into a space left behind by a larger retailer. A more typical shopping center of the future may look like the Apex Center of New England in Marlborough, which has two hotels and a sprawling 80,000-square-foot complex with laser tag, go-karts, bumper cars and more. Shoppers World in Framingham is working to broaden itself beyond retail. A proposal to the city last month calls for a 175-unit, seven-story apart- A former Macy's home goods store at the Auburn Mall is being turned into medical offices by Reliant Medical Group. The closure in January of Sam's Club leaves a 133,000-square-foot vacancy at the Worcester Crossing plaza. The Shrewsbury Planet Fitness. The chain has taken advantage of retail closures for its own expansion. Toys "R" Us's store on Route 12 in Auburn is one of seven the company owns in Central Massachusetts due to close. P H O T O S / G R A N T W E L K E R P H O T O S / G R A N T W E L K E R

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