When Sports Authority went out of business in 2016, it left the faux Gothic building at the corner of 10th Avenue and Broadway in Denver vacant for the first time in decades.
Now, just in time for Halloween, the iconic “Sports Castle” is rising again from its retail grave, hosting Spirit Halloween, the Spencer Gifts-owned online and seasonal retailer of Halloween decorations, costumes and accessories.
“Working with a tenant like Spirit allows us to activate the space temporarily as we think through the most thoughtful way of moving forward with adaptive reuse of the Sports Castle and the redevelopment of the surrounding property,” said Adam Radcliffe, managing principal and founder of Denver-based Outpost Development.
The building’s owner, Gart Properties, brought in Outpost to manage the post-Sports Authority redevelopment of the property. Outpost has since secured a number of temporary tenants, according to a report in Westword, including the Denver Flea and the Birdseed Collective.
Radcliffe added that the Museum of Contemporary Art is set to hold its annual gala at the Sports Castle later this year.
The pop-up strategy serves a dual purpose: It generates some income from the otherwise empty property and it also activates the space, deterring vandalism.
“Given the dual objectives of keeping the space active and finding the right tenants, we’re able to be flexible in terms of what we charge to ensure the success of the tenants,” Radcliffe said.
It’s an unlikely predicament for the historic, 45,330-square-foot property. The Sports Castle started its long life as an auto dealership in 1925. The building first won the nickname “Sportsman’s Castle” when the Gart family acquired it and converted it into the flagship for their chain of Gart Bros. Sporting Goods stores in 1971. Gart then merged with Sports Authority in 2003.
After Sports Authority’s demise, the Gart family retained ownership of the Sports Castle. A new division of the company, Gart Properties, owns most of the buildings on the block between 10th and 11th on Broadway, and the Sports Castle is likely to play into a broader project involving those other properties.
Filling the space
While Gart Properties and other owners of former Sports Authority locations seek long-term tenants, seasonal and temporary retailers like Spirit Halloween reap the benefits.
“When a company goes out of business, it’s open real estate,” said Lisa Barr, divisional vice president for marketing and creative with Spirit. “You have to imagine any landlord would want to lease that space.”
This Halloween season, Spirit is occupying six of the 31 properties that Sports Authority occupied across Colorado at the beginning of 2016.
“With Sports Authority closing down, they left a lot of locations with a good range of sizes for us,” Barr explained.
With retail downswing across the country, Spirit has steadily grown to fill the open spaces, adding between 50 and 100 new locations each year for the past 15. The company’s footprint this year is larger than it’s ever been, with approximately 1,300 locations across North America.
In Colorado, the story is slightly different. According to Barr, Spirit operated 29 locations in the Centennial state in 2015, 28 in 2016, and is currently running 28 again this year, including three in Denver.
Inside the Denver market
Spirit’s stagnant growth in Colorado offers a new perspective on the local retail real estate sector, particularly in Denver, where the market is nearly as tight as it has ever been.
According to CBRE Research, while vacancy rates in Denver’s retail sector are on the rise, increasing to 6.8 percent in the third quarter of 2017 from 6.1 percent in the second quarter, they are still near the historic low of 5.3 percent that CBRE reported at the end of 2016.
The types of storefronts Spirit occupies – big-box spaces – are particularly in demand, according to CBRE. Thanks in part to Sports Authority’s bankruptcy, there were 92 of these spaces on the market in mid-2016. Twenty-two of them were snapped up by the end of that year, but vacancies are again on the rise in 2017. According to CBRE, there were 80 big-box spaces vacant at the end of the third quarter.