The last couple of years have been problematic for many big-box retailers:
- JOANN’s filed for bankruptcy – yet again – in 2025
- Big Lots declared bankruptcy in 2024, with a few stores still operating
- Bed Bath & Beyond shuttered everything in 2023 and is selling online
- At Home filed for bankruptcy in the middle of 2025, and closed stores
There is good news, however. “Backfilling has been steady with off-price leading the charge. Burlington, Ross and the TJX banners are taking much of this space, and are still in expansion mode,” Northmarq Senior Vice President of Investment Sales Daniel Herrold told ConnectCRE.
Not Created Equal
While the big-box chains impacted differ, they tend to share the same profile that got them into trouble. Specifically, “large store footprints, thin margins and middle-income customers who have shifted spending toward value-driven concepts,” Herrold explained.
Meanwhile, the big box closures don’t appear to be impacting the broader retail sector, with the national average 2025 vacancy trending between 4% and 5%.
Herrold pointed out that the challenge isn’t so much widespread vacancy as it involves replacing hard-to-place assets. For instance, department store space is a question mark, with Macy’s planning to close underperforming stores, Kohl’s announcing location closures, and JCPenney quietly exiting spaces as its leases expire.
On the other hand, “with new construction at record lows and demand still strong, the better boxes stay high in demand,” Herrold said.
What’s in It For Investors?
Herrold said that empty big boxes can have their appeal to investors—at least, those who understand entitlement work and redevelopment.
“Most of these assets come with no income because the tenant is already gone,” he explained. Even if a lease still exists on paper, no rent is forthcoming because the building is dark.”
Basically, an investment play isn’t about cash flow as much as “it’s about the dirt, the location, and what can be built or repurposed there,” Herrold said. Finding new tenants or cutting the boxes down to smaller spaces might not be the best strategy. “The value is almost always in what the property can become, not what it is today,” he said.
Moving Forward
Even with the TJ Maxx, Burlington and Ross brands backfilling the space, boxes as redevelopment sites can be the best and most effective use for the real estate.
But Herrold warns interested investors not to fire up the backhoe immediately. There’s a great deal of upfront work involved, including feasibility studies, zoning and city approvals. “Once those are done, it comes down to execution,” he said.
Furthermore, the process is best for investors who are experienced in redevelopments and understand the layers of bureaucracy and complexity that come with them. Those successful investors can provide a well-planned development to boost the surrounding property and area. “Done right, the process breathes new life into the entire property and gives it a stronger, long-term foundation,” Herrold said.
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