Advance Auto Parts Is Closing Over 700 Stores -- Who Should Landlords Target To Backfill The Real Estate?
Over 700 former Advance Auto Parts stores are expected to close in 2025; who are the likely tenants and users to take the real estate?
In November Advance Auto Parts AAP 0.00%↑ announced plans to close 523 corporate stores and exit from 204 licensed locations operated by independent dealers.
The closures have now started.
Hilco Real Estate is managing the upcoming disposition of 224 leased sites and 24 locations owned by Advance Auto Parts.
The remaining sites likely have expiring leases for space that will be returned by Advance Auto to Landlords at lease termination.
While the closures are across the country, the highest concentration is in the Western U.S. and include all 150 stores that Advance Auto had operated in California.
So with over 700 former Advance Auto stores set to hit the market, what happens next to the real estate?
The 224 leases that Hilco is marketing for sale probably provide a representative sample of the real estate that Advance Auto is vacating:
156 of the 224 locations (~70%) are freestanding buildings
41 of the location are “end cap” spaces in strip malls
27 are “in-line” space in neighborhood shopping centers
The freestanding Advance Auto stores are 7,000 - 8,000 square feet and located on high traffic roads with good access and visibility.
They typically have open floor plans, ample parking and even a grade level roll-up door — features that will allow them to be repurposed for many uses.
The endcap spaces are similarly sized to the freestanding buildings, tend to have good street level visibility and access and serve as the anchor space to a strip mall or small neighborhood center.
The inline spaces are located within a strip malls and neighborhood centers and will likely be restricted from non-retail uses.
One issue in looking for replacement users is there is no major tenant or retail category likely waiting in the wings to backfill the Advance Auto real estate.
Competitors O’Reilly Auto Parts and AutoZone already overlap with Advance Auto in most markets.
While O’Reilly and AutoZone will be happy to absorb sales that had been generated by the shuttered Advance Auto stores, they are not likely to backfill the real estate.
So what users may take the space?
Retailers
Many former Advance Auto stores will remain as a primary retail use — and shoe retailers might be a particularly good fit.
Many shoe retailers have shifted stores from regional malls to neighborhood sites.
For instance Foot Locker, Skechers and Shoe Show have all opened shoe stores in former Walgreens drugstore buildings.
The Advance Auto real estate — at 7,000-8,000 square feet — is closer to the size range desired by shoe retailers seeking neighborhood locations.
Like this former Advance Auto Parts store in Greenville, North Carolina that was backfilled by a regional shoe retailer.
Even small grocery stores could be interested in the space.
For instance, a 7,400 square foot former freestanding AutoZone in Richmond, Virginia was recently acquired for $1.95 MM by El Nuevo Happy Mart for conversion into its 2nd area grocery store and tortilleria.
Collision Centers and Body Shops
While collision centers are increasingly opening in larger spaces, a 7,000-8,000 square foot body shop may be an ideal size in small and rural markets.
A former Advance Auto building can likely be configured to handle a moderate level of vehicle repairs with enough space for multiple work bays and a paint booth.
And many new and relocated collision centers have been created via the adaptive reuse of buildings once used for retail, grocery and drugstore sales.
Convenience Stores
A former Advance Auto building in Sedalia, Missouri was recently acquired by convenience store operator QuikTrip.
Plans have yet to be filed with local officials that suggest how QuikTrip plans to repurpose the building and/or site.
Car Wash Units
Express Wash Concepts acquired a former freestanding ~8,000 square foot Napa Auto Parts store in Livonia, Michigan.
Express Wash demolished the building and is now constructing an express conveyor belt car wash on the property.
Of course some Advance Auto Parts buildings are also likely to be adapted for "unconventional" reuses.
Like this former Advance Auto Parts store in Middletown, Ohio.
It was repurposed as Fur-Ever Friends Pet Crematory and now provides cremation and memorialization services for deceased pets.
