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Joann Fabrics Liquidation: 800 Retail Spaces Up for Grabs – A CRE Investor’s Guide
Wednesday, March 19, 2025
Joann Fabrics Liquidation:
A Unique Opportunity for Commercial Real Estate Investors
Unlocking 18.5 Million Square Feet of Retail Space Amid Bankruptcy Shakeup
Joann Fabrics’ liquidation is sending ripples through the commercial real estate sector, creating a rare opportunity for investors and retail landlords alike. With 800 locations and approximately 18.5 million square feet of retail space hitting the market, this wave of available store spaces presents both challenges and opportunities for stakeholders in the retail property market.
The Breakdown: What Joann’s Liquidation Means for CRE Investors
1. Who Owns Joann’s Retail Space?
Unlike some retailers that own a significant portion of their properties, Joann leased the majority of its locations. This means most of these stores are controlled by landlords, including private investors, REITs, and institutional firms.
● 40% of Joann’s leases are held by REITs and institutional investors, meaning larger players will feel the immediate impact of these vacancies.
● The remaining 60% is in the hands of private investors, who now need to reposition or re-lease these spaces efficiently.
2. Where Are These Properties Located?
Joann’s real estate footprint is evenly distributed across the U.S., with the largest concentration of stores in the Northeast (30%), followed by the South (25%), and Midwest and West (22% each).
Store Size Breakdown:
● The average store is 22,700 square feet.
● Locations range from 5,000 sq. ft. (small format stores) to 55,000 sq. ft. (large anchor spaces).
● The majority are between 10,000 and 25,000 sq. ft., making them prime candidates for a range of retail tenants.
3. Why This Could Be a Lucrative Opportunity
Despite the rise in retailer bankruptcies, the demand for well-located suburban retail spaces remains strong. Recent liquidation events, such as Bed Bath & Beyond and Party City, saw a significant portion of their spaces re-leased quickly.
Potential backfill tenants include:
✔ Discount & Off-Price Retailers: TJ Maxx, Ross, Burlington
✔ Fitness & Wellness Brands: Planet Fitness, Orangetheory, CorePower Yoga
✔ Healthcare & Medical Retailers: Urgent care centers, dental offices, specialty clinics
✔ Specialty Grocery Stores: Trader Joe’s, ALDI, Sprouts
Challenges for Landlords and Investors
While demand is high, there are some potential obstacles:
❌ Competing Vacancies – Many of these stores are near other recently closed retailers, such as Big Lots and Party City, creating increased competition for tenants.
❌ Rising Interest Rates – Investors and landlords may face financing challenges for redevelopment or tenant improvements.
❌ Changing Retailer Expansion Strategies – Some brands have already secured space in nearby former Joann locations, limiting demand in certain areas.
Investment Strategy: How to Capitalize on Joann’s Liquidation
✔ Identify High-Demand Submarkets – Locations in well-trafficked suburban retail corridors will lease up quickly.
✔ Target Growth-Oriented Retailers – Off-price retailers, healthcare providers, and fitness centers continue to expand aggressively.
✔ Consider Mixed-Use Redevelopment – Converting select locations into medical office spaces, co-working hubs, or service-based retail could increase value.
✔ Act Fast – Strong locations may get absorbed quickly, making early negotiations with prospective tenants key.
Final Thoughts:
A CRE Market Shift in Motion
With retail space still in high demand and new supply limited, Joann’s liquidation presents a compelling opportunity for savvy investors and retail landlords. By strategically positioning these locations to meet current tenant demand, investors can maximize occupancy rates and returns in a shifting retail landscape.
Hi, I Am Sanjeev
REAL ESTATE BROKER / ENTREPRENEUR
Sanjeev Advani is a seasoned real estate entrepreneur and financial strategist from Bakersfield, California. Having built and sold his Company Synergy Property Management, he specializes in innovative investment solutions and portfolio growth. With a rich background spanning real estate, financial planning, and community leadership, Sanjeev brings a blend of tenacity, expertise, and visionary thinking to every endeavor. Dedicated to excellence and driven by a passion for empowerment, he is committed to guiding clients and communities toward success and prosperity.
