Big Box Retailers: Good, but not Perfect, Neighbors – Dentagraphics

big-box-retailers

National and regional chain retailers are reliable drivers of site traffic. Undoubtedly, they bring lots of eyes to the area where they choose to locate. As a result, these magnets for development are commonly recommended by real estate professionals as desirable neighbors for dental practices. And that’s for good reason.

But they’re not perfect.

The industry is renowned for its ever changing location preferences. Big box retailers like Target and Walmart, though very attractive as neighbors in the short and medium run, can be very unattractive vacant neighbors.

Industry observers generally estimate that big box stores have a lifespan of approximately twenty to thirty years. And while that is a healthy amount of time for any single business to remain in one location, the challenge is finding a new occupant once these stores do relocate or close. Few replacement tenants are willing to or even capable of occupying a 100,000 ft2 building footprint originally designed with a very specific user in mind.

In contrast, most office and residential spaces are easily transitioned from one user to another. Add to this the fact that online marketplaces such as Amazon present a continuously rising threat to the business model of chain retail and a dental office overly dependent on traffic from a nearby retailer has a lot of eggs in one basket. If you plan to invest in an office location for many years partially based on the presence of large retail tenants, carefully consider how long they have occupied their buildings and what might happen if their doors were to close for good.

But don’t start running from big box just yet.

For the majority of dentists near these large retailers, vacancy will never be an issue or can be solved through the terms of your own lease. Of course we always recommend that you consult a local real estate professional’s opinion as each instance is case by case.

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