There May Be A Very High Cost In Re-tenanting Vacant Big-Box Retail

I was at a recent commercial real estate brokers meeting where the topic touched on the high cost of converting big and medium retail boxes to accommodate smaller-sized retail tenants. Taking a former CVS or RiteAid building of 35,000 square feet and demising it to fit 2-3 smaller tenants could cost the landlord $100/sf or more in tenant improvements, and in some of the suburban areas the nnn rental rate of $12-15/rsf nnn per annum means it might take the landlord eight years or more just to recoup their upfront construction costs of retenanting the space.  Electrical, HVAC and construction costs above the ceiling were mentioned as big-ticket items.