Closures leave Tucson with a glut of empty former big box stores

More big box stores across Tucson are expected to become vacant in 2025, and finding new tenants poses a challenge to the city’s landscape.

Last year, retail chains like Walgreens, CVS Conn’s, Big Lots and 99 Cent Only closed Tucson locations.

Fabric and craft retailer Joann closed all its locations earlier this year and Party City is expected to close local stores this year as well.

Further, Macy’s and Kohl’s are struggling financially and have both announced a round of store closures, although none yet in Tucson.

The cost of construction has made solutions of past years unrealistic.

“It used to be that a vacant big box could be split into two projects,” said Nancy McClure, first vice president of commercial real estate firm CBRE. “A $100,000 cost to demise a building 15 years ago costs $1 million today.”

To start the year, there were more than 1.6 million square feet of vacant big box space throughout the market, McClure noted in her annual Big Box report, that looks at properties of 10,000 or more square feet.

“We have to grapple with letting these properties sit vacant or give some flexibility to developers,” McClure said.

She said the empty JCPenney at El Con Mall should ideally be demolished and rebuilt, which is what happened to the old Levy’s building to make way for Walmart.

The vacant Macy’s at Park Place is difficult to market in its existing form, with 153,511 square feet in three stories.

And the 90,000-square-foot former Curacao building at 3390 S. Sixth Ave. would likely better serve a warehouse function rather than a retailer with a large footprint.

New uses for old spaces

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McClure recently represented the landlord of the vacant Conn’s Home Plus building on Broadway and Craycroft Road in a lease with Savers, which is relocating from its current spot on Broadway and Park Place Drive.

In their existing state, some empty big box spaces have been able to convert to entertainment venues, such as pickleball courts, trampoline parks and arcades.

The empty Bed, Bath & Beyond on Grant and Swan roads, for example, is being occupied by neighboring Roadhouse Cinemas with bowling and arcade games.

Michael Sarabia, CEO of DSW Commercial Real Estate, just negotiated a lease at the vacant former Staples store at Wilmot Road and Broadway to Ross Dress for Less.

The 20,000-square-foot space brings the Wilmot Place project to 100 percent leased, he said. Ross is making some interior adjustments before opening later this year.

But, aside from big retailers looking for big spaces, marketing empty big boxes is challenging because many of the buildings are older and shorter.

Demolition and redevelopment could attract limited-service hotels that are looking to be in urban areas, near amenities.

But restrictions on height in some parts of the city prevent that.

“Hotels bring in a lot of bed tax,” McClure said. “I feel like we really need to embrace height where it should be.”

She said the upcoming vacancies could be recast as hotels or multifamily developments with retail on the ground floor.

Interest from entertainment venues continues to come in.

“I am always bullish,” McClure said, “on finding solutions.”