And services, but you need to market them online as well.
We had a used bookstore go in next to us, we cringed a bit, but smiled and said “hi”. They actually do a bit of business, I see people going in and out from time to time, but they are not doing well, they have for rent signs in their windows, and they have actually come to ask me if I wanted to take over their space (another year, and sure, just a bit tight for me right now). We had a dollar store go in a few years before that, and they did decent business, until another discount dollar store went in down the block that was bigger, the day that place opened its doors, my neighbor lost at least 75% of their sales.
Yeah, retail, even specialty niche retail, other than maybe clothes or fashion, is really a non-starter these days.
The property probably used to be an Indian burial ground and the hauntings drive the tenants insane. After cleaning up after so many murder suicides, the owner just stop trying.
Perhaps it’s a ‘write-off’ property that the owner can claim depreciation and losses to make sure that his/her tax liability for the overall taxable portfolio is minimised. IOW, buy up a property, leave it vacant, claim losses of value, submit tax claim <-----> WIN.
Granted my business has been around, in the same location, for almost 40 years, but you’d be surprised when filling out a credit app how many people just shrug their shoulders and say ‘most people do that’ when I make a big giant X over the personal guarantee part. A few of them will say ‘uhh you have to fill that part out’ and usually (again, I’m just speaking for me) if I say ‘just try handing it in like that and see what happens’ or ‘We already have Sysco, Reinhart and Gordon in here, I’m not putting my house and car on the line so I can by mayo from you’.
In nearly 40 years we’ve probably done business with hundreds of vendors, filled out credit apps for at least half them and the personal guarantee for maybe 10 of them. It’s something to avoid whenever possible.
But, to reiterate, our business is well established. It’s not that we’re a couple of 20 year olds that just got a business loan at 19% and decided to open a store at a strip mall.
And back to the vacant strip mall, another possibility is that they’re holding out for condos. That’s been huge lately, but I’ve seen it take years and years to find a buyer, negotiate a deal and then get started.
There could be code issues.
They could be owned by someone other than who you think owns them and they hoping the city takes them back (get an address and check the tax/assessor web site to see if the city is getting their money).
And don’t forget the possibility that they just might be junk. If they’re old and run down and every business that walks in sees that they’re going to have to spend 30k just to get the doors open (and that AC that belongs to the unit next store is still going to loud), why not go into the place down the block with more amenities and is ready to go for about the same price?
Another issue is that most commercial leases run only a year or two, and then can be renegotiated, and there is no rent control on commercial property. I saw this about a thousand times in real estate: The tenant negotiates a two year lease, works hard to make a go of the business, gets successful, and at the end of the lease term the landlord doubles or even triples the rent. Place goes bust.
There’s also the fact that all commercial businesses have to be approved by the city government. Wal*Mart has been trying to get into New York City for decades; ditto McDonald’s into Teaneck, NJ. The gummint won’t let them.
There could be any number of reasons, as mentioned above. But what I see over and over are new centers opening up faster than any reasonable increase in supply (supply of retail space) is warranted in a given market. The new centers are clean, attractive and usually start with several anchor stores, restaurants, etc. that attract other tenants. Some of the tenants are new to the market, but the new centers also attract tenants from older centers nearby. And some of the new stores put older stores out of business. So, in time, older centers are left struggling to attract tenants and shoppers. A landlord can only reduce rent so much and still maintain the property and pay taxes.
I do know of a few really well managed older shopping centers. The rents aren’t top of the market like at new centers, but the owners really work at keeping a nice, sustainable tenant mix that attracts shoppers. But I know of more older centers that struggle to stay open, or they allow a downward spiral in the quality of stores and tenants.
If the center mentioned in the OP is really at a key crossroads, my bet is the owner expects someone to come by and purchase the property for redevelopment. Having no leases, or very short month-to-month leases, will allow demolition and redevelopment.