The new retail post-apocalypse: Across the Bay Area, former Walmart, Fry’s and other big box store sites are finding new life

SAN JOSE — Just a few years after experts insisted an Amazon-spawned “retail apocalypse” would doom several of the Bay Area’s big-box store sites, a growing number of the large commercial properties that once were home to Walmart, Kohl’s, Fry’s and other chain stores are finding new life.

While some have pushed for the expansive land hosting these stores to be turned into housing, a fresh crop of merchants is busy scouting for existing locations that could help them tap into a Bay Area economy awash in wealth created by the AI boom.

“Retailers want to be here,” said David Taxin, a partner with Meacham Oppenheimer, a commercial real estate firm. “This area has so much disposable income.”

As of March, the San Jose metro area had the nation’s highest median household income at $175,500, according to a report from market-focused digital publisher Visual Capitalist. The San Francisco-San Mateo metro area was second at $141,300.

“The South Bay is so strong, it’s a very resilient market,” said Jim Fletcher, a Bay Area commercial real estate executive. “The Valley Fair-Santana Row corridor and the Blossom Hill Road corridor are some of the strongest retail areas in California.”

Former shopping malls set to be repurposed include Vallco, a dead and mostly demolished retail center in Cupertino that is slated to be replaced by a mixed-use neighborhood of homes, shops, restaurants and offices.

The purchase by a real estate firm of two empty retail buildings at Stoneridge Mall in Pleasanton leaves the future unknown for the sites that once hosted Nordstrom and JC Penney.

In North Oakland, the proposed development of two housing towers could trigger the demolition of an existing Trader Joe’s grocery store.

A new wave of ethnic markets is also taking over empty stores around the Bay Area.

“We are seeing a fairly significant push from ethnic grocers — South Asian, East Asian, Hispanic,” said James Chung, founder and principal executive with The Econic Co., a commercial real estate firm. “They have entered the market fairly aggressively the last five years.”

The opportunities for transformation are plentiful. In one notable instance, a fire that destroyed a Home Depot hardware store in South San Jose in 2022 eventually created an opportunity for Dick’s Sporting Goods to redevelop the Blossom Hill Road site into an experience-oriented House of Sports.

A few miles to the east, near the corner of Monterey Road and Blossom Hill Road in South San Jose, Altitude Trampoline, Ace Pickleball Club and City Sports Club now occupy a building that once contained a Walmart superstore.

“We are very busy, and we have a ton of repeat customers,” said Namaad Jackson, general manager with Altitude Trampoline Park at 5502 Monterey Road. “We have found a great location here.”

According to several real estate executives, most of the properties are in high-profile locations, leading them to believe that there were issues with the struggling retailers who left, not the area in which they operated.

As a result, a classic supply-and-demand dynamic has emerged yet again, said John Cumbelich, founder and CEO of real estate firm John Cumbelich & Associates.

“There is a lack of new retail supply (space) just as you have new demand entering the Bay Area,” Cumbelich said. “We are seeing a rise in development costs and construction costs, which has created an environment where demand will swamp supply.”

In San Jose, Vallarta Supermarkets is taking over a spot where Toys ‘R Us and Babies ‘R Us once operated in The Plant shopping center.

“A lot of times, the only new opportunities for a regional retailer or a grocery store is to backfill second-generation space,” Chung said.

Sports Basement now occupies a longtime Barnes & Noble bookstore spot. Next door, Hobby Lobby is operating in a one-time Bed Bath & Beyond store in a retail hub near the interchange of State Route 85 and Almaden Expressway.

“That Hobby Lobby store is a home run, and Sports Basement is off to a great start,” Fletcher said.

Urban Air Adventure Park has filled up a former Fry’s Electronics store on Willow Pass Road in Concord. Fry’s closed that store and all of their others in 2021.

At least two empty Fry’s Electronics sites are headed for tech-oriented futures. In North San Jose, Supermicro Computer is redeveloping a Fry’s site into a tech campus, with construction underway on a building that is poised to loom over the old Mayan-themed headquarters.

In Fremont, an old Fry’s is being marketed as a site for advanced manufacturing or artificial intelligence uses.

For nearly a decade, Korean grocery store H Mart has orchestrated a Bay Area expansion that began with the retailer’s first Northern California locations, both in San Jose and both in former grocery store spaces. In Dublin, H Mart created a grocery and dining operation at a one-time Orchard Supply Hardware space.

In January, the company disclosed plans to reuse a shuttered Kohl’s two-story department store in Fremont. In what will be H Mart’s largest U.S. operation, the retailer plans an Asian supermarket on the first floor, while the second floor will feature a food hall, restaurants, a bar and entertainment spaces.

T&T Supermarket, another Asian grocery chain, leased a former Walmart store at Westgate Center in Southwest San Jose. In Newark, T&T has also taken over a one-time Macy’s store at Newpark Mall, where the retailer plans its largest grocery site in California.

Sprouts, an organic food-oriented grocer, struck a deal to lease a long-vacant site where Orchard Supply Hardware had operated for years on Cottle Road in South San Jose.

Ross Dress for Less has been pursuing spaces in San Jose and Martinez properties where drug stores once operated, spaces that have also drawn the interest of specialized tenants.

Trudys Brides and Special Occasions took over a former Walgreens in San Jose’s Willow Glen neighborhood in a move out of a longtime Campbell spot. Goodwill moved into a closed Rite Aid store on East Capitol Expressway in San Jose.

Grocery Outlet has filed proposals to open markets in Oakland that were previously occupied by Walgreens.

With current conditions, retailers are poised to intensify their hunts for existing and empty store locations, some experts said.

“The supply of retail (space) inventory is shrinking,” Cumbelich said. “Where are these new users going to go except to existing sites?”