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Movie-rental stores are next retail backfill opportunity

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Vacant movie-rental stores are beginning to flood the retail real estate market here and elsewhere as the nation’s second-largest chain liquidates and industry goliath Blockbuster Video fights for its life.

Oregon-based Movie Gallery Inc. began liquidating this spring, the victim of a consumer shift toward mail-order and kiosk rentals. Movie Gallery had eight stores here, six of which operated under the name Hollywood Video. Blockbuster, based in Dallas, had 35 local stores, some of which have already closed even though Blockbuster has so far held off on filing bankruptcy.

In both cases, retail brokers are lining up deals to backfill the spaces, which tend to be free-standing stores ranging in size from 5,000 to 7,500 square feet.

Blockbuster is getting out of its leases when they come up for renewal, said Kyle Hughes, a broker for Veritas Realty LLC.

Blockbuster’s lease for one of those spaces, at 8360 E. 96th St. in Fishers, ended June 30. About two-thirds of the 6,000-square-foot space is already being retrofitted for a 21st Amendment Liquors. An electronics retailer is close to signing a lease for the balance of the space, said Hughes, who is representing the partnership that owns the building. The asking price for the space was $22 a square foot.

Hughes also is representing the owner of a 6,000-square-foot building at 5215 N. College Ave. that housed a Movie Gallery. A restaurant interested in that space will try to line up neighborhood support at a Tuesday meeting of the Meridian Kessler Neighborhood Association.

Potential users for vacated movie-rental stores run the gamut from restaurants to medical office users, said Mark Perlstein, a broker for Sitehawk Retail Real Estate.

“Blockbuster had great real estate,” Perlstein said.

The chain’s prime locations have been attractive to auto parts stores in small towns around the state, said Bill French, a retail specialist with Cassidy Turley.

The spaces are too small for value-oriented retailers, such as Dollar General stores, that have been snapping up space nationwide as they grow to meet demand from consumers who are watching their spending.

French and Perlstein said retailers that play into the consumer appetite for savings are among the most active in the retail real estate market these days.

The two brokers both worked on what is probably the largest deal in the Indianapolis market so far in 2010—K&G Fashion Superstore’s lease of 40,000 square feet at Castleton Crossing, a center at 82nd Street and Allisonville Road owned by Texas-based American National Insurance.

The store, which is moving there in August from a 30,000-square-foot space elsewhere in Castleton, will occupy a space vacated several years ago by Circuit City, the failed electronics retailer. Perlstein represented K&G in the deal and French represented the owner of the center.

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  1. A Tilted Kilt at a water park themed hotel? Who planned that one? I guess the Dad's need something to do while the kids are on the water slides.

  2. Don't come down on the fair for offering drinks. This is a craft and certainly one that belongs in agriculture due to ingredients. And for those worrying about how much you can drink. I'm sure it's more to do with liability than anything else. They don't want people suing for being over served. If you want a buzz, do a little pre-drinking before you go.

  3. I don't drink but go into this "controlled area" so my friend can drink. They have their 3 drink limit and then I give my friend my 3 drink limit. How is the fair going to control this very likely situation????

  4. I feel the conditions of the alcohol sales are a bit heavy handed, but you need to realize this is the first year in quite some time that beer & wine will be sold at the fair. They're starting off slowly to get a gauge on how it will perform this year - I would assume if everything goes fine that they relax some of the limits in the next year or couple of years. That said, I think requiring the consumption of alcohol to only occur in the beer tent is a bit much. That is going to be an awkward situation for those with minors - "Honey, I'm getting a beer... Ok, sure go ahead... Alright see you in just a min- half an hour."

  5. This might be an effort on the part of the State Fair Board to manage the risk until they get a better feel for it. However, the blanket notion that alcohol should not be served at "family oriented" events is perhaps an oversimplification. and not too realistic. For 15 years, I was a volunteer at the Indianapolis Air Show, which was as family oriented an event as it gets. We sold beer donated by Monarch Beverage Company and served by licensed and trained employees of United Package Liquors who were unpaid volunteers. And where did that money go? To central Indiana children's charities, including Riley Hospital for Children! It's all about managing the risk.

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