Ugh, they bought a beloved local pharmacy chain around Seattel three years ago and the chain has gone downhill ever since. This doesn’t look good.
I had t noticed how Rite Aids were essentially extinct in my area now. Used to have one about a mile from me but it changed to a Walgreens around three years ago. Closest one to me now is 40 miles away.
Not surprised. Nothing can compete against the CVS/Aetna and Walgreens juggernaut. There’s a Rite-Aid near me in a depressing, empty, small 60’s-era strip mall with an abandoned A&P, and a tattoo parlor. I’ve been thinking it would be demolished for more than 5 years now. Maybe Covid delayed it.
Retail generally is also in a very bad spot right now, since about early Q2. Everyone south of WalMart has been reporting bad numbers for the last couple of months - even Target was down over 4% same-store in Q2, and the NPD numbers for everyone who has any exposure to tech or back-to-school are dismal for Q3 - someone who is already in a borderline position like Rite-Aid is ripe to get pushed all the way off the edge.
If you take the time to read the article you’ll see with Rite-Aid it has a lot to do with their business practices during the opioid epidemic. It’s not just “people don’t shop in stores anymore”. There’s a ton of money in pharmaceuticals, and they took in their fair share in apparently ill-gotten gains.
Hunh.
If you think it’s bad now, wait a few months. The last of the COVID aid that was financially propping up poorer households is about to expire (day care aid). The spending explosion from the poor segment of the US that got propped up with aid plus got a year of quarantine to build savings is ending. All retailers are about to feel pain.
And it begins.
Gonna be some very cheap office space on the market soon. Too bad nobody wants it!
Can it be converted to housing?
I bet the rental prices for downtown office space don’t drop at all, though. I expect the property owners would rather sit on vacancies for a while and hope that CEOs crack the office whip to eventually restore demand because their profits have been so huge to date.
We’ve had that discussion elsewhere (maybe the economy thread?). Some can, but often the issues are very complicated and involve zoning and even how office buildings are laid out differently than apartment buildings. For example, you can’t really have interior apartments that don’t have windows, so if the office building is just one big square, that can make reformatting it difficult.
There’s a property in the suburbs around here that’s been vacant since 2015 - and the tenant then was a pop-up sports apparel shop that lasted a month. The location is ok - biggest knock is its lack of parking.
On a whim I looked it up and it’s one of the most expensive leases in the area for one of the oldest buildings. I don’t really understand their strategy, but perhaps there’s some tax reason to let it rot I’m not aware of.
Aside from professional hitmen needing a sniper’s nest, as David Fincher recently showed us.
I have no idea what WeWork even is/was. Stupid name.
Commercial property can be pretty weird that way. We have a glut of available retail space locally, built due to mandates that the ground floor of new downtown residential buildings be reserved for commercial use.
But despite the oversupply, the commercial rents never drop: the developers won’t lower them because it would decrease the value of the building, and that would mean trouble when they re-negotiate their financing. I expect there are tax considerations/incentives at work, too.
In the UK (London anyway), the usual trick is to keep the ground floor commercial vacant through unaffordable rents for a couple of years, then apply for change of use planning permission to convert the space to residential.
There was a Hulu documentary about WeWork. I started watching it, but after 30 minutes, I was still unclear what the heck they were all about, so I stopped watching.
They were just serviced office providers who managed to persuade people (well, mainly Masayoshi Son) that they were a tech company and therefore to throw billions of dollars at them.
In the simplest terms, WeWork was supposed to be a network of co-working office spaces you could use for short-term use. Of course because it was infected with techbro nonsense it turned into a lifestyle brand with near religious fervor.