Washington Prime Group is among the landlords who are filling anchor vacancies with fulfillment operations.
Beleaguered retailer Sears plans to close its store at Morgantown Mall in Morgantown, W.Va. before the end of this year, leaving an 80,000-sq.-ft. space without an anchor. But in a move that would have been unimaginable in the heyday of traditional retail in general and Sears in particular, mall owner Washington Prime Group Inc. already has lined up a new tenant—WVU Medicine, the largest health care system in West Virginia.
Of course, WVU Medicine won’t be selling appliances, apparel or housewares at this space. And it won’t be treating patients there. Rather, the space will be converted into a logistics, distribution and fulfillment center for WVU Medicine for items like personal protective equipment (PPE) and medical equipment.
The Sears conversion represents the first project in Washington Prime Group’s Fulventory initiative, announced in May. The initiative aims to replace shuttered retail spaces at the REIT’s properties with centers geared toward last-mile fulfillment, BOPIS (buy online and pick up in store) and clearance merchandise operations. Lou Conforti, CEO of the Columbus, Ohio-based REIT, says 20 to 25 retail-to-warehouse conversions are already in the pipeline among the company’s more than 100-property portfolio.
Washington Prime Group’s Sears conversion in Morgantown also represents one piece of a broader trend—property owners transforming large retail spaces, oftentimes former big-box and department stores, into fulfillment centers and other logistics facilities. In another example, Simon Property Group has partnered with Fillogic, a New York City-based technology company with a logistics-as-a-service platform, to open Fillogic Hubs at some of its properties. The company will be opening Fillogic Hubs at the Livingston Mall and Gloucester Premium Outlets.