What will happen to all those shuttering car dealerships?
By Jason Buckland, Sympatico / MSN Finance
You ever randomly think back to The Green Mile and feel guilty that, no matter what Tom Hanks tried, he had no real shot of saving John Coffey and keeping him from the electric chair?
Well, that’s kind of the way I feel every time I drive by a moribund car dealership these days, knowing George Steinbrenner might have a better chance of making it to 2010 than the gasping auto lot does.
According to recent stats, of Canada’s 700 GM dealerships, somewhere between 240 and 280 will close in the next 18 months. And that’s only General Motors. With auto sales yet to rebound to a level reminiscent of healthy industry, there’s no telling how many lots that hawk Ford, Chrysler, Toyota or whoever’s products may shutter its doors in the coming year, too.
So, with that comes a simple question: What’s gonna happen to all that real estate?
Chances are, many of the dealerships near you aren’t just located in out-of-the-way fringe areas, and some enjoy prime real estate in residential neighbourhoods or up-and-coming commercial districts.
The Toronto Star wonders, then, just what realm of possibilities an empty city showroom lot may hold.
Apparently, some local architects and urban planners are “drooling over the possibilities” of transforming the sites into primo high-rises or functional commercial space.
And if a new set of high-priced condos isn’t your desire for an ideal neighbourhood renovation, there’s even a calling to turn dealership space into everything from public art galleries or car-pooling hubs to solar power substations, whereby a few acres of sunny parking lot might work wonders to generate electricity for a region of your city.
While there’s no telling what will go down in every city across the country, it’s pretty certain that dealership land turnover will be happening. As the Washington Business Journal (WBJ) says, “it’s not like people are lining up to take showroom space off anybody’s hands” nowadays.
Poor dealers, too, I say. Hopefully some can weather the storm and afford to hold onto the land which, according to the WBJ, will be a real estate “gold mine” a few years down the road.
Odds are, though, is that construction could be coming to a dealership near you soon. Kind of a fitting sign of the times, too. Not to paraphrase Hannibal Lecter or anything, but the first holes dug at a failed car lot – to many, whether fair or not, the defining image of the downturn – could become the scars to remind us the recession is, in fact, real.