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We’ll be right back: Glendale confident vacant big box stores will be filled

Local market outperforms national market

Posted 3/29/20

North Glendale residents and shoppers may have noticed three glaring vacant storefronts: Sears in the Arrowhead Towne Center, which closed in July, Toys R Us and Staples, which have each been closed …

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We’ll be right back: Glendale confident vacant big box stores will be filled

Local market outperforms national market

Posted

North Glendale residents and shoppers may have noticed three glaring vacant storefronts: Sears in the Arrowhead Towne Center, which closed in July, Toys R Us and Staples, which have each been closed since 2018.

Passers-by might infer doom and gloom from these vacancies, coupled with increasing headlines of big box stores closing nationwide as many major retailers struggle to keep up with online retail. But the Glendale staffers who assist property owners in securing new tenants are not worried. Director of Economic Development Brian Friedman noted that these three retail vacancies are the largest in all of Glendale and says any national trends of declining retail are not touching Glendale.

“I think that’s been proven, the fact that they’re all full. And Sears was not a Glendale thing, Sears was a national thing. And we have all the faith in Macerich (which owns Arrowhead Towne Center) and in our marketplace to shortly correct that, not just with something, because I think they’ve had five or six different somethings they could have immediately done. I think they are being selective.”

Sears shuttered dozens of both Sears and Kmart stores in 2019 and plans to close more than 100 this year. Glendale’s Toys R Us closing, which was near 75th Avenue and Bell Road, was also a national decision, not a Glendale-specific decision, as the company closed all of its nearly 900 stores in Summer 2018. The toy retailer has since reopened just two stores, in New Jersey and Houston.

Both Toys R Us and Sears have had temporary tenants. Toys R Us was occupied the costume and decoration store Halloween City and the Arrowhead mall displayed an animatronic dinosaur exhibit in the Sears location around New Year’s.

Mr. Friedman pointed out it takes much more than a company being interested in a space for a deal to be struck. In the case of Sears, which is co-owned by Sears and the mall, or Staples, which is part of a shopping center anchored by Home Depot southeast of 59th Avenue and Loop 101, the property owner has to consider how a new tenant would fit into the overall picture.

“The property owner gets to decide, do they want that tenant in the mix?” Mr. Friedman said. “Do they think that helps the tenant mix? Do they think this is a long-term tenant? Is it a short-term tenant? Do they like the dollar amount? Do they like the term of the lease?”

Mr. Friedman noted that both of these centers have little to no vacancy or turnover aside from Sears and Staples.

“I think they’re at the point where their market, their level of occupancy and the gross sales per square foot for those centers are significant and wants maintenance of the right kind of tenant and they have the ability to wait for that right kind of tenant,” he said.

Mr. Friedman noted that it’s usually easier to fill a large retail space when the property owner decides to split the space into smaller storefronts.

However, Glendale has also had cases in recent years of big box stores being filled as is, when the gym EoS Fitness took over an Albertsons northeast of 59th Avenue and Loop 101 and a Safeway at 59th and Thunderbird avenues.

Arrowhead Towne Center has performed much better than many other malls, both nationally and regionally. Aside from Sears, the mall has near-zero vacancy rate, which is a stark difference from some struggling malls in the Valley, such as Metrocenter and Paradise Valley Mall in Phoenix.

“It’s reversing the trend. It’s not on the decline; it’s rapidly increasing,” Mr. Friedman said, noting the malls sales numbers have increased in recent years. “…They are absolutely an economic engine for our community and for the region.”

North Glendale and north Peoria’s high-income demographics help fuel business to the mall.

“They expect certain types of end users and apparel, dining options, residential options, shopping options, and the marketplace is absolutely responding,” Mr. Friedman said. “So, in total all signs point upward and well upward for the Arrowhead area and for Arrowhead mall.”

The mall and the entire Arrowhead retail region will be helped by industrial development in Glendale near Loop 303, as high-paying jobs are added to the city and many of those workers will mostly live between Loop 303 and Loop 101 in either Glendale or Peoria.

“They will be going to Arrowhead mall, they will be shopping at Tanger (Outlets) down near Westgate,” Mr. Friedman said.

The city is in the process of changing general plan and zoning designations to expand possible land uses for the mall, not because they think the mall is in danger of failing, but to give the mall on-the-spot flexibility in a quickly-changing retail landscape.

Tabitha Perry, Glendale’s special projects executive officer, mentioned hypothetical options she’d seen at other malls, including offices or apartment housing on the mall property. She said she’d researched malls that had apartments on the second floor and restaurants on the first and some malls that included roller coasters. Though she said, roller coasters were not the plan, Ms. Perry said the city was looking to cast a wide net with possible land uses for the mall.

While the departure of an anchor business like Sears leaves a glaring vacancy at the mall, it also allows for broad possibilities of new businesses.

“Just to give an example, the Sears location could potentially turn over into a hotel,” Ms. Perry said.

Malls across the U.S. have also occupied their empty storefronts with health clinics. Some universities and colleges have also opened research facilities in malls.

Sears isn’t the first anchor to close at Arrowhead Towne Center. Forever 21 was formerly Mervyns, and Sears was preceded by a Montgomery Ward. Both of those retail chains are now defunct. The mall’s Macy’s was a Robinsons-May before Macy’s bought the company.

Editor’s note: Arrowhead Towne Center management did not return request for comment on this story.