Lots of commercial space in Wilmington, but ‘market infill is coming’

One often hears how much development, construction and change is going on in the Wilmington area.

Don’t look now, but there will likely be more changes in the port city soon, say those in the commercial real estate market.

Given the busy nature of Wilmington, it’s easy to forget the number of large, empty spaces that used to be occupied by retailers like Kmart (116,000 square feet) and Dick’s Sporting Goods (51,000) on South College Road and Stein Mart (60,000). on Oleander Drive.

Other large and empty locations include the closed Earth Fare location on 943 Military Cutoff Road, the former OfficeMax and Dress Barn locations on New Center Drive, a former Rite Aid on 6930 Market St., and a former grocery store on Exchange Drive on North College Road.

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“The retail landscape is definitely very different from a few years ago,” wrote Brian Eckel, co-founder of Cape Fear Commercial, in an email. “Given the changing behavior of shoppers and the steady rise in e-commerce, retail remains the most fluid sector for commercial real estate. Every few months we seem to hear of another brand setting or announcing bankruptcy, or (a significant number) of Store closings. The shock waves of shutdowns are still felt across the industry, underscoring the need to find new creative ways to fill these empty spaces. “

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Even so, Tom Heitman, owner and CEO of Wilmington Commercial & Residential Real Estate, said he doesn’t see Wilmington as a huge bunch of empty stores, but rather as “a normal bunch”.

Heitman said he could not go into details but, with the exception of Kmart, many of the above positions were “fairly full” even if negotiations were not yet over.

“New players will come in,” he said. “All of these places are being swallowed up.

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Heitman said he spoke to seven or eight Florida, New Jersey, and Michigan franchises, some of which were grocery chains “that have never been to the area”.

Eckel said that “the former Earth Fare is arguably one of the best retail locations in Wilmington. I don’t think this space will stay in the market for long.”

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Regarding the former Stein Mart – which longtime locals will remember used to be a rose shop – Eckel said, “Our company is working with the owner to retrofit the former space with better tenants and higher rents. Though it is is too early to announce one. ” We believe that replacing tenants with consumers is expecting a shopping experience and this vacancy provides us with an opportunity to upgrade one of the best retail destinations in Wilmington. “

Those in the commercial real estate space say it can take a long time to fill large vacancies such as those left by large stores. Heitman said it was normal for these larger rooms to be empty for 18 to 24 months.

A prime example of this is the former Kmart store on South College Road, which closed in 2017. However, Heitman called this “a special case” since the owners of the property – the family-run Jack A. Sneeden Corporation – seem in no great rush to do something with it.

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“It takes a hell of a long time,” said Brian Grabowski of Trademark Properties of Raleigh, the listing agent for the former Dick’s Sporting Goods location at 816 S. College Road. (Longtime Wilmington locals will remember that it was the former home of Best Products, which closed in 1997.)

Grabowski said the rental process could take five or six months at some national retailers alone.

Dick’s has moved to its new location on Oleander Drive in the redesigned Independence Mall, one of Wilmington’s major commercial retail locations that has successfully reinvented itself to date. Grabowski said Dick’s is still using its old location and that his lease won’t expire until later this summer.

In the meantime, he continues to make calls from “several national retailers,” Grabowski said. “Names Everyone Would Know.”

Some are interested in renting out the entire space, others want to use only part of it. Both options are currently being examined, said Grabowski, but overall “we were very happy with the activity.”

Regarding why a fair amount is currently available, Grabowski said there is some “functional obsolescence” for many big box spaces, especially shopping malls. The pandemic has also had an impact, accelerating the closure of some outlets.

Heitman said he doesn’t see any vacancies in Wilmington and they might actually increase.

“You will see more of the big boxes that go out of business if people keep shopping online,” he said.

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Eckel said, “The reality is that some of the vacant big box locations are likely to end up being demolished and redeveloped.”

“More turmoil is likely to come in this rapidly evolving commercial real estate sector,” he added. “But the right locations will likely offer plenty of opportunities to fill these spaces with new concepts and creativity.”

Overall, according to Heitman, Wilmington Market is a desirable place right now, and locals should expect more and more new names to choose from. Wilmington was a “high-growth, low-competition market,” he said, and while it’s still growing, competition is increasing too.

Elsewhere in the state, Heitman said, people are so desperate to fill storefronts that they offer businesses free rental for a year. In Wilmington, he said, this is anything but unknown.

Contact John Staton at 910-343-2343 or [email protected].