Toys R Us, Shopko and Sears: They are Idaho Falls’ ghosts of retail’s past. The buildings that once housed these powerhouses, big-box retailers now sit empty.

Combined, the buildings that used to house the shuttered Sears, Toys R Us and Shopko stores, as well as the relocated C-A-L Ranch store and Deseret Industries’ former downtown location, make up more than a quarter of a million square feet of retail space.

What will happen to these giant, empty buildings? If they’re to attract new tenants, it’s going to take some creativity, according to local commercial real estate agents.

Each commercial building comes with unique challenges; age and location are priorities for potential tenants. But every retail store shares at least one challenge: the growing popularity of e-commerce and declining interest in brick-and-mortar shopping.

“The trend is these ‘sticks and bricks’ retailers that have a location are having to compete more and more with the internet,” said Kevin Murray, a real estate agent with Keller Williams Realty East Idaho.

The closing of retail stores has nothing to do with Idaho Falls’ desirability, Murray said. The trend away from brick-and-mortar stores is happening everywhere.

According to Coresight Research, a retail data research firm, U.S. retailers have announced 6,986 store closures and 2,985 store openings this year, through June. That’s compared to 5,864 closures and 3,251 openings for the full year 2018.

Idaho Falls’ empty large retail stores likely won’t be occupied by another retailer.

“You’re not going to sell a used big box store to another big box store,” Murray said.

Murray is the listing agent for a 6,100-square-foot building on Northgate Mile, formerly home to HyWay Drug. Built in 1955, the property is smaller and older than the vacant big box stores.

The property’s location is good — 33,000 cars pass it every day — but its age and lack of adaptability present challenges.

“It’s like trying to get your daughter a date if she’s still got curlers in her hair,” Murray said.

Instead of leasing the entire space to one retailer, the building likely will be chopped up and leased to several.

That could be the future of many of Idaho Falls’ vacant stores.

Brent Wilson, brokerage services specialist with Thornton Oliver Keller, said there is interest in Idaho Falls’ vacant retail space, however he expects the buildings to be reused in new ways.

“It’s what we call adaptive reuse,” Wilson said. “The businesses are going to be the experiential/entertainment-type of uses, golf simulation for one example. There’s also going to be multiple vocational schools occupying big box buildings.”

One example of adaptive reuse is U-Haul buying former Kmart locations and reusing them as storage facilities.

Another example comes from Pocatello. A charter school bought retail space in the Pine Ridge Mall and is transforming it into a new campus.

Wilson himself has invested in a business that utilizes the adaptive reuse strategy. Wilson and his brother, also a commercial real estate agent, bought a haunted house, formerly known as Dr. Slaughters, on First Street. The building was a grocery store before becoming an entertainment attraction.

“The building was well beyond its useful lifespan, but, hey, that makes for a great haunted house,” Wilson said.

Office space, as well, is in high demand in Idaho Falls, and repurposing a former bog box store would cost from 1/3 to 1/5 the cost of building new.

The growing trend of adaptive reuse is indicative of brick-and-mortar retail’s waning success, but in-person shopping isn’t completely dead. People still prefer to shop for certain things in-person, such as groceries and furniture, Wilson said.

And it’s helpful to offer an all-in-one shopping experience, hence Walmart’s success with two area stores and Costco’s announcement that it’s coming to Idaho Falls.

Kerry Howell, co-owner of Century 21 High Desert, is hoping to find someone to lease the former downtown location of Deseret Industries Thrift Store. He said there’s been interest from a furniture company and from tenants who would turn the building into an event center.

While a central, downtown location is attractive for some uses, new retailers are trending toward Hitt Road, where major retailers have clustered in recent years. It’s where Deseret Industries’ new thrift store is located. Ferrell’s Clothing, a downtown business for more than half a century, relocated to Hitt Road, as well.

“The basic common denominator is the retail theory of agglomeration,” Wilson said. “They all like to cluster together.”

Even 17th Street, south of Hitt Road, one of the busiest arterial roads in Idaho Falls, isn’t the best place to open a new store.

“There are opportunities to build new along Hitt Road, and that will be their first choice,” Wilson said.

Large brands, such as Walmart and Costco, that can afford it would rather buy their own land and build a store. They typically won’t buy a used building and repurpose it. Building new can cost about $100 more per square foot more than repurposing an existing building, not including the cost to buy land.

“The big box guys have always owned their real estate,” Wilson said. “Basically, so they can control everything around them.”

While new retailers likely won’t pop up in where former retailers failed, the buildings will find a new use. Idaho Falls’ shopping centers might just look a little different.

Howell said the city is becoming more diversified, with new retail hot spots appearing.

“It’s going be interesting to see what really transpires,” he said.

Reporter Ryan Suppe can be reached at 208-542-6762. Follow him on Twitter: @salsuppe.

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