Nick Williams, commercial real estate adviser, stands in a back storeroom at the vacant JCPenney store in downtown Salem on Monday, Nov. 23. (Amanda Loman/Salem Reporter)
For the first time in over four decades, Salem’s JCPenney was empty on Black Friday.
In late October, the inventory at the big-box retailer, located at 305 Liberty St. N.E., was cleaned out following JCPenney’s bankruptcy. Since then, the 102,500-square-foot building has sat empty, its windows papered up awaiting a new owner.
Built in 1964, the JCPenney location has served as one of downtown’s anchor stores, luring consumers to the city center where they would spend money as well at restaurants and other retailers.
Now, the building is up for sale. What downtown looks like in coming years is intertwined with what a new owner does with it.
SVN Commercial Advisors announced on Twitter that JCPenney’s former Salem location was on the market for $4.7 million.
The property is available at a difficult time for large retailers who’ve seen consumers shift online and the Covid pandemic put a damper on shopping excursions. Downtown earlier lost another one of its anchors when Nordstrom closed. Macy’s, formerly Meier & Frank, remains the only major downtown department store.
While another department store isn’t likely in the former JCPenney location, there are hopes it’ll continue as another type of anchor for downtown.
The changes to the building, perhaps with a mix of housing and retail, could soon be on their way.
Nick Williams, a commercial adviser with SVN, said that while it’s typical for such commercial real estate to sit unsold for months if not years, that probably won’t be the case with the JCPenney building.
“I bet that it changes hands somewhere between the next 90 to 190 days, which, for real estate, is very, very quick,” he said.
The property is currently owned by Corvalis-based ACN Properties. Williams said that the company is ready to sell the property rather than redevelop it and he’s already had a serious interest in it but couldn’t disclose details.
He said the building is “super desirable” with three sky bridges connecting it to the Chemeketa Parkade, as well as to Salem Center and Liberty Plaza. He said the building is well built and engineered and will likely stay intact. A developer could even add floors, he said.
Williams said that it’s also priced right at about $47 per square foot. It’s not uncommon for apartments to cost $200 a square foot, he said.
Another big sweetener for the property is its location in both an opportunity zone and an urban renewal area. Opportunity zones are investment programs created by the 2017 federal legislation that provided tax breaks to developers.
The city has seven urban renewal areas. Each siphon off a portion of property taxes, diverting that money from general government purposes to use for grants and loans to develop property.
Kristin Retherford, city urban development director, said in an email that the city is working with the broker to make them aware of the resources available for the property.
“We do not have our own plans for the property, but encourage a mix of retail and residential,” she said. “Buildings like this are a challenge and we look forward to collaborating with potential buyers on creative approaches to new uses of the building that will add vibrancy to our downtown.”
Williams said that the building’s zoning allows for a range of commercial businesses as well as affordable and mid-market “workforce” housing. He said that the surrounding area has a low vacancy rate for multi-family housing.
And the urban renewal incentives could encourage a significant housing element in the building’s next life, he said.
TJ Sullivan, the co-owner of Huggins Insurance and the president of the Salem Main Street Association, said the property’s redevelopment is important for downtown and the rest of the city.
“Everyone in Salem should keep their fingers and toes crossed,” he said.
He said the building could serve as a new anchor for downtown with retail on the ground floor and homes above. That would mean possibly over a hundred people living and shopping in downtown Salem.
He pointed to how the city helped restore the McGilchrist & Roth building, located at 441 State Street, that now includes Archive Coffee and Bar, Ritter’s restaurant and other commercial spaces, as well as apartments. He said its revitalization helped spur other development nearby.
Sullivan said he would like to see the building’s grey and Spartan exterior livened up and for the lighting around it to be improved to make the area more inviting.
Williams said that JCPenney was involved in the community and was a member of the Salem Area Chamber of Commerce. He said the company selling the old building will hold out for the right buyer interested in putting down roots in Salem.
Williams said he has memories of the JCPenney, visiting it at Christmas time and getting his family portrait taken there. He said it was sad to watch all its inventory boxed up as it closed.
“It’s unfortunate that it wasn’t sustainable,” he said. “But at the same time, it’s got to be something else.”
RELATED COVERAGE: Salem’s JCPenney store hauntingly empty, awaits a new life
Contact reporter Jake Thomas at 503-575-1251 or [email protected] or @jakethomas2009.
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