Bed Bath & Beyond, its BuyBuy Baby chain and Tuesday Morning store closings this spring and early summer leave behind almost 1,000 large holes in shopping centers — 40 in Dallas-Fort Worth alone.
That sounds like a lot of empty storefronts, but experts say they’ll be snapped up.
Waiting to sign new shopping center leases are everything from golf simulators to indoor pickleball, fitness centers, retailers with new store plans such as smaller format concepts from Macy’s and The Container Store, off-price chains Burlington, Burkes Outlet and HomeGoods, Total Wine & More and the evolved dollar stores — Five Below and its new competitor Popshelf.
“There’s a tremendous need for second-generation retail space, a box that’s already finished out with good air conditioning and bathrooms that can be backfilled quickly,” said Jill Tiernan, executive vice president at The Retail Connection.
Bed Bath & Beyond has A+ locations and was known for being able to negotiate below-market rents across the U.S., Tiernan said. Those leases with single-digit rents are for sale and can be assumed, she said.
For years Bed Bath & Beyond has been trying to fashion a comeback but instead filed for bankruptcy last month and said it would be closing all 360 namesake stores and 120 BuyBuy Baby locations. Tuesday Morning filed its second bankruptcy in three years and has already closed many of its 487 stores.
There’s also a shortage of space, Tiernan said. “Nothing is being built except in Prosper and new construction is very expensive.”
High-profile Bed Bath & Beyond stores on Park Lane just east of North Central Expressway and NorthPark Center in Dallas and another north of Galleria Dallas next to Nordstrom Rack will likely have strong interest.
“We get calls daily about the Park Lane store and we don’t even own it,” said Ward Kampf, president of Northwood Retail, which owns The Shops at Park Lane across from that Bed Bath & Beyond location. “I wish we did.”
Even chains that are going out of business have profitable locations and that 50,000-square-foot Bed Bath & Beyond in Caruth Plaza was one of the retailer’s highest volume stores.
Northwood owns Hillside Village at Mockingbird Lane and Abrams Road in East Dallas where one of Tuesday Morning’s strongest stores occupies 12,803 square feet. He’s not too worried. When Stein Mart closed in 2020, Sprouts Farmers Market was already waiting for the space to open up, he said.
Demand for retail space is high, said Bob Young, executive managing director at Weitzman. D-FW’s retail occupancy of available space hit a historic high last year and was above 94% for the first time since 1990, when the firm started collecting local shopping center data. Likewise, new construction last year was below the past decade’s annual average.
Construction costs and financing are high, Young said. “I’m an optimist, but I don’t see new construction in 2023. If anything comes along, it will be mid-2024 at the earliest.”
Tuesday Morning stores in West Plano and in Southlake will be leased quickly, he said.
In Fort Worth, Hulen Fashion Center’s former Tuesday Morning space already has interest from another retailer and a fitness concept, said Mike Geisler, managing partner of Venture Commercial. “Landlords are going to get as good or better rents.”
Bed Bath & Beyond stores are mostly 30,000 square feet, but some are larger. Most of Tuesday Morning’s stores are in the 7,000-square-foot range but some are bigger.
What retailers are looking that could fit:
- The Container Store plans 76 new stores over the next five years.
- Five Below plans to open 200 stores this year and 1,000 by 2025.
- Dollar General said it will open more than 1,000 stores this year and it’s planning to grow its newer Popshelf concept to 1,000 locations including 300 this year.
- Ross Stores said it will open 100 new locations this year.
- T.J. Maxx is planing 150 and remodeling 400.
- Burlington expects to open 500 to 600 new stores over the next five years including 70 to 80 this year, fewer than it wants to because of supply chain issues for construction materials. Burlington has more than 900 stores and has said it wants to be a 2,000-store chain.
Twitter: @MariaHalkias
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