Large Retail Glut Presents Opportunities, Revisted

Last weekend the massive Nike Store closed its location at Thomas Jefferson and M St. It will be moving down the street to a smaller location. But it will leave a huge vacancy on a street that is not lacking in them. I wrote last March about how this glut of large spaces actually should be viewed as an opportunity.

Coincidentally, last week Washingtonian wrote an article expressing bemused surprise that Georgetown is “cool” again. The writer attributed the increase in activity in the neighborhood to the fact that the pandemic cleared out a lot of retail spaces and forced landlords to lower the rent. This caused some restaurants like the new Yellow to reconsider Georgetown as a destination.

That was essentially what I was predicting last March. And for what it’s worth, here is that article again:

Last month, WBJ reported that the Nike Store may be on the way out. And GM is hearing rumors that the Amazon Books store next door is also on the way out. These closures, if they come to pass, would add to several other large spaces that have also recently become vacant.

Nike took over the space at 30th and M in 2012. Previously the space was used for many years by Barnes and Nobles (offering one of the more popular third places in the neighborhood). Prior to the Barnes and Nobles, the building hosted the Cerberus 1-2-3 movie theater since 1970. Its unusual size and large windows owe to the fact it was originally built as a car dealership.

From the moment Nike moved in it felt like perhaps they bit off more than they could chew. The three vast floors felt empty, particularly to patrons who once roamed the Barnes and Noble’s bookshelves. And the fact that it appears that Nike is bowing out with years left on the lease would suggest they agree with that assessment.

And while the Amazon Books next door doesn’t occupy the same footprint as the Nike store, it’s still sizable. And both spaces would join the sprawling CB2 and Gap spaces that also just became vacant.

The question is whether the era of these large showroom retailers has come to an end, at least in Georgetown. Can you really see another clothing store takeover the Gap or Nike spaces? GM can’t.

Of course looking to the history of both building suggests a path forward. As mentioned above, the Nike building was a car dealership before it was a multi-screen movie theater before it was a bookstore. The Gap has an even older history. It is the former Forrest Hall, and has been everything from a Civil War military jail to a lecture hall where Mark Twain once spoke.

Obviously we don’t need military jails or car dealerships anymore, but it suggests that the spaces are a lot more flexible than just selling t-shirts and running shoes. As retail recedes more and more into the internet, neighborhoods like Georgetown have to offer experiences. Food is an obvious first choice. But other forms of entertainment could also succeed.

The point is to stop thinking about them as vacant retail spaces, and start thinking of them as blank canvasses.

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