Citywide, retail vacancy was at 11.9% in 2012, but as of Oct. 1 it was down to 6.8%, according to data from the city of Chandler and CoStar, a company specializing in commercial real estate information. At the majority of the city’s intersections, the city also saw a decrease in the last seven years in retail vacancy.
“We are moving in a positive direction as we have repositioned and turned those corners into alternative uses,” said Micah Miranda, economic development director for the city. “The big thing from the economic development department is increasing the economic vitality of existing intersections and setting priorities. It is spelled out in the city’s strategic plan, so that alone sets the organizational tone for the importance of maintaining these areas and encouraging redevelopment and infill.”
Miranda said increased traffic counts at major intersections and a reduction in retail product, meaning limiting new buildings created and zoned for retail-only use, also contributed to the decrease in the number of vacant retail businesses citywide.
“We’ve seen nearly a 50% drop citywide in retail vacancy,” Miranda said. “While we are happy with that, it is still something we pay attention to. Reinvestment and redevelopment and converting existing properties into alternative uses, whether that’s office or multifamily or single-family residential or education, it is very much a priority and is something that is a major part of our strategic framework.”
Retail vacancy then and now
In 2012, then-Mayor Jay Tibshraeny called for the creation of a committee to look into the growing number of vacancies in these four-corner retail areas at major intersections in the city. The committee looked at the intersections of Alma School and Elliot roads; Alma School and Warner roads; Alma School and Queen Creek roads; Alma School and Ray roads; Arizona Avenue and Warner Road; Cooper and Ray roads; and McQueen and Pecos roads.
Some of the intersections, such as Alma School and Elliot, had a high retail vacancy rate of just over 46% in 2012, according to data from the city of Chandler and CoStar. That rate is now just over 9%.
“I was concerned after the Great Recession, even though there was a lot of vacant retail before, after the Great Recession there was so much vacant retail, it was shocking,” Tibshraeny said. “The [study] was in response to the vacant retail, the over-zoning of the corners. I thought there might be a path to look at that and make some adjustments.”
The committee, composed of business owners and developers, came up with several recommendations, including the city examining landscape, parking and signage requirements as well as looking at the zoning requirements for areas pegged for redevelopment.
“It shifted the way we looked at things, and coming off the Great Recession, we were just seeing so much vacancy and empty buildings—you couldn’t build retail on every corner of the city,” Tibshraeny said. “That was the traditional development model from the ‘70s: The corners were retail, and then you have industry and housing.”
Tibshraeny, a lifelong Chandler resident, said now he notices a difference in the four corner retail areas.
“I think it’s been successful,” he said.
Six of the seven intersections studied in the report are under 10% retail vacancy, according to CoStar. The exception is at Alma School and Warner roads, an anomaly, Miranda said. In 2012, the retail vacancy at that intersection was just under 11%; now it is at just under 25%. Miranda said a Fry’s store that closed on the northeast corner of the intersection in 2017 contributed to the jump in vacant square footage.
“It has been a major focus of our efforts in that area to work with the property owner to repurpose the facility,” Miranda said. “It’s an important corner for City Council.”
The reuse and repurposing of big-box stores
Todd Folger, first vice president at CBRE, a commercial real estate services and investment firm in Phoenix, said evolving and adapting retail patterns are causing near-constant changes in retail.
“I think retail today is not developed or thought of the same way it was 20 or 30 years ago,” Folger said. “A lot of it today is more experience-oriented, and food and beverage is a huge part of the market. In these master-planned communities, like Chandler, you have a subdivision and those housing developments, and on the corners you had big grocery stores and other retail.”
Folger said the change in retail and retail developments on major intersections is going on everywhere in the U.S.
“Retailers are all having to rethink what retail looks like. It’s very exciting, and operators and cities are getting creative to come up with new ideas,” Folger said. “A lot of publicity gets made about store closures and bankruptcies, but for all those people that are closing, we are opening just as many new concepts. They may not be as big of footprints as before, but we’ve got new concepts coming in that are smaller in scale but are more numerous.”
The city’s planning administrator, Kevin Mayo, said the city now works with more experience-based retail and nontraditional businesses looking to go into those corners.
“We work with them to make sure we can facilitate parking and traffic patterns or even working with them on zoning code tools for adaptive reuse to help revitalize a piece of property,” Mayo said.
Mayo said the city has also seen several schools take up residence in strip malls or former big-box stores.
El Dorado High School moved into a new location on the northwest corner of Alma School and Elliot roads this summer, School Leader Bahja Ali said. The public charter high school’s new location is the former Fresh & Easy grocery store, she said.
“Parents and students love the location,” Ali said. “A lot of them were familiar with the Fresh & Easy that used to be here and were impressed with what we did with it. It’s accessible and not tucked into a neighborhood, which makes it a lot easier to find.”
Ali said being on major crossroads has made the school more visible in the community while maintaining a small-campus atmosphere.
“We also have a major advantage where we are for public transportation; it’s a lot more accessible to the students and families that need it,” Ali said.
Mayo said that revitalization of many of the intersections has completely changed the face of parts of the city.
“We encourage residents to visit the plazas they haven’t visited in a while,” Mayo said. “There are hidden gems in there.”