The convenience and ubiquity of ecommerce have been a game-changing force for brick and mortar retail locations, forcing household names like Toys R’ Us and Kmart to downsize or shut their doors completely in recent months and years. These retail locations are leaving behind tens of thousands of properties in prime locations, empty eyesores along some of the most-trafficked highways in the United States.
It’s unlikely that a similar retail store will take up residence in these now-empty standalone properties, some of which can be 100,000 square feet or larger. However, these empty buildings are not doomed to turn into dilapidated burdens on their communities and former owners. Their prime locations and zoning – the area is likely already zoned for retail – make it relatively easy for a new commercial facility to move right in.
“There’s nothing wrong with these buildings – in fact, they’re often in great condition and are located in well-traveled areas along major thoroughfares and near other commerce,” said Kevin Wolfer, CEO of Kennedy Funding. “That presents a unique opportunity for an investor to save significantly on development costs while adding value to the community by preventing this property from falling into disrepair.”
At Kennedy Funding, we have a few ideas – and the capital – you need to kickstart a conversion project.
1. Self-storage
Self-storage facilities have experienced significant growth in the past few years, with high occupancy rates and healthy annual returns. Converting existing properties into self-storage facilities is already common in the market, with an average cost savings of 30% versus building new. The large footprint and wide-open interior space make self-storage a perfect new use for an empty Kmart, an income-generating facility once again after some investment and renovations.
2. Office space
Office space remains in high demand, and if the economy continues growing the way it has been, that trend will only continue. That empty department store could become the neighborhood’s next office space. The property can be subdivided internally into smaller working spaces for small-to-mid-size teams or even a co-working space. With many of these former retail spaces located next to major highways and other commerce, employees would have access to nearby banks, shopping and little spots to grab a bite to eat.
3. Warehouse space
Former standalone retail locations are set up perfectly for warehouse space. Properties that were once home to 100,000-square-foot big box stores can be easily converted into warehouse space. These massive spaces are easy to convert into warehousing, with a large, empty inside which could easily be outfitted with industrial shelving and space for an office and a breakroom. Plus, the facility already has truck bays for unloading and loading goods.
4. Indoor recreation facilities and fitness centers
An indoor recreation facility like a gym or indoor mini-golf may sound like an out-of-the-box idea for old retail space, but these facilities are the perfect size to hold the neighborhood’s coolest new destination. If you’ve never been to an indoor recreation facility, it’s worth the visit: these recession-proof facilities have some creative twists, from trampolines to laser tag to indoor skydiving. Indoor recreation and fitness centers thrive year-round, even when inclement weather shuts down most outdoor activities.
Using a direct private lender to fund your facility conversion project
Traditional financing institutions may see a risky prospect when they see plans to convert a retail facility. The process of converting a facility can unearth some expensive hazards or unexpected fixes. Risk-averse financing institutions may be reluctant to lend millions to a project which may stall or push off anticipated completion deadlines.
With a direct private lender, there’s more flexibility to read in between the lines of your application. The entire project is considered and can be considered beyond just your credit score or a history of bankruptcy. If the title is clean, you have an accurate appraisal report and the environmental report shows no problems, a direct private loan from Kennedy Funding can get your conversion project off the ground. Contact Kennedy Funding to begin your application today.
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