What's In Store

A movie theater in your old supermarket? How Charlotte fills the retail void

The Bi-Lo at 5336 Docia Crossing Road closed in Charlotte last year.
The Bi-Lo at 5336 Docia Crossing Road closed in Charlotte last year. jsimmons@charlotteobserver.com

A movie theater will take the place of a shuttered grocery store. A bowling alley has occupied an empty department store spot. A DMV office opened in a mall food court. Unconventional tenants like these are taking over vacant retail space as retailers close their doors.

It’s a trend in Charlotte just like it is all over the rest of the country: People are shopping more online. Retailers are feeling the pinch and closing stores. Malls and shopping center space lie empty, collecting dust and losing property value.

When looking to fill empty retail space, it’s become the norm for landlords to look to non-retail tenants, including salons, financial institutions and gyms – or “things you can’t click on,” said Josh Beaver, a vice president at The Nichols Company, a Charlotte commercial real estate firm.

“This is an easy conversation to have because it’s the world we live in,” Beaver said. “Landlords are, for lack of a better word, forced to look at new strategies for their shopping centers that don’t include traditional retail lineups.”

Landlords may be nervous about losing big retail tenants, but there’s reason for optimism, Beaver said: The empty retail spots are “some of the best real estate,” often in highly visible areas such as prominent street corners.

Creative reuse of old retail space comes as stores nationwide have opted to close their doors amid mounting pressure from e-commerce growth.

As part of a company-wide cost-cutting effort, for instance, J.C. Penny announced plans last year to shutter 138 department stores nationwide, including ones in Gastonia and Monroe. Also last year, Walmart closed a number of Neighborhood Market locations nationwide, including the one on Independence Boulevard in east Charlotte.

The list of new tenants filling the retail real estate void in Charlotte is varied and often surprising.

A movie theater called Studio Movie Grill was approved last month to take an old Bi-Lo space in Prosperity Village in north Charlotte, for instance. An escape room called Breakout – an hour-long game that requires players to solve puzzles and crack codes – opened last spring at Carolina Place Mall. It combined two spots: a former portrait studio and another space that had been vacant for about six years.

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Studio Movie Grill will take the place of a Bi-Lo store on Docia Crossing Road, off Prosperity Church Road. Prosperity Village Area Association

In malls, landlords are also adding offices that they hope will increase foot traffic. A National Guard office opened in March in the spot previously occupied by a jewelry and accessories store called Epic at Northlake Mall. A license plate office opened in the food court at Eastridge Mall in Gastonia in 2015; management has said it’s been “good for traffic.”

Nichols Co. is adding a 10-acre used-car dealership called EchoPark, a chain recently started by Charlotte-based Sonic Automotive, at the Coliseum Center, which was once anchored by a Kmart but laid vacant for years. The complex has been torn down and is being given a $35 million makeover.

Beaver also said Nichols is “at the goal line” with a non-retail tenant to fill the space formerly occupied by the Walmart Neighborhood Market in east Charlotte, which closed last March.

Carolina Place Mall owner General Growth Properties recently turned a former Dillard’s spot into a bowling alley at Four Seasons Town Centre in Greensboro (Dillard’s took the spot of Belk, which closed.) The Chicago-based real estate investment trust also opened a Dave & Busters in an old Sears spot at Columbiana Centre in Columbia.

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General Growth Properties opened Dave & Buster’s restaurant and arcade gaming center last year in 30,000 square-feet of a former Sears at Columbiana Centre in Columbia. Tim Dominick tdominick@thestate.com

“Anchor boxes are potential future locations for supermarkets, cinemas, entertainment venues and other large-scale users, adding uses consumers want in one, convenient location,” the company said in an email to the Observer.

Around Charlotte, developers are breathing new life into the former spaces of big-box retailers like Walmart and Kmart with offices, storage space and even a new charter school.

Jubal Early, a senior vice president with Lincoln Harris, represents Carolinas HealthCare. Often, he said, retail spaces have all of the things that medical tenants are looking for – expansive parking lots, high visibility and favorable neighborhood demographics.

Big-box retailers, such as department stores, also have open floor plans, he said. A medical tenant like CHS doesn’t have to gut the building or do extensive improvements when moving in, he added.

There are challenges in putting unconventional tenants in malls, however.

Some malls have restrictions on medical tenants, for example, Early said.

Another challenge landlords and developers face is that department-store space is so large that it’s hard to secure a long-term tenant. That’s the case at Eastridge Mall, where former Sears and J.C. Penney spots have been empty for four years and a year, respectively.

Looking ahead, both Beaver and Early say they’re open to looking at filling larger retail spaces, including grocery stores that have closed their doors, as retailers continue to shrink their store footprints.

“It’s concerning because of the Internet craze and people shopping from home. But (retail is) always going to be great real estate,” Beaver said.

Katherine Peralta: 704-358-5079, @katieperalta

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