, landlords are facing a challenge to find new uses for more than a dozen sizable stores in high-end locations across the country.and seven Nordstrom Rack locations by the end of the month, leaving landlords such as Cadillac Fairview and Oxford Properties to fill spaces that range in size from 30,000 to 230,000 square feet., but commercial real estate brokers are predicting a shift from traditional department store anchors to more creative, mixed-use spaces.
“I think the malls could benefit from having these kinds of new-age, experiential brands coming in,” Mr. Markowitz said. “It might draw a different type of customer to the centre, which would be accretive to the other retailers.” “We’re definitely looking to do something more exciting here, maybe a little bit less conventional,” Mr. Sherman said, adding that it’s unlikely another discount brand will take over the space.
Ms. Dale said landlords have to be willing to spend the money to break up large box stores and turn them into something new. John Crombie, executive managing director for retail services at commercial property brokers Cushman & Wakefield, was involved with a number of the Target spaces that were transitioned after the retailer left the market. He said the estimated cost of splitting up a 120,000-square-foot space ran as high as $17-million.
But while smaller boxes might be expensive initially, the move could ultimately result in more revenue for landlords. Anchor tenants typically pay less rent per square foot than a tenant with a smaller footprint, and retailers covet space at Canada’s top malls.