Retail Market Flooded with 3.8M SF as 99 Cents Only Stores Liquidates

The retail real estate market in Southern California is about to see a significant influx of available space as 99 Cents Only Stores prepares to liquidate and close all 371 of its locations, including 164 stores in the region. The discount retailer cited financial troubles related to the pandemic, inflation, and theft as reasons for its bankruptcy filing.

Despite the potential vacancy of about 3.8 million square feet of retail space, industry experts believe that these spaces will be filled relatively easily. The stores, averaging 23,000 square feet in size, are considered to be in the “junior box” category, making them attractive to potential tenants.

While dollar stores have faced challenges in recent years, with Dollar Tree announcing plans to close 1,000 stores and Dollar General experiencing a decrease in sales and profits, the closure of 99 Cents Only Stores is seen as an opportunity for landlords to potentially increase rents for these prime retail locations.

Real estate professionals anticipate a quick backfilling of the vacant spaces, with investors and retailers already expressing interest in acquiring the properties. The closure of these stores may pose challenges for underserved communities that rely on discount retailers for affordable groceries and household items.

As the market prepares for the influx of available retail space, the future of these locations remains uncertain, with potential for redevelopment into new retail spaces or alternative uses such as apartments. The impact of losing these popular discount stores will be felt by both consumers and employees who rely on them for affordable goods.