Pending Kmart closure creates commercial real estate buzz
Photo above: The lot’s ease of access to I-26 and State of Franklin Road will be a unique selling point. Photo by Scott Robertson
By Scott Robertson
With the June 6 announcement from Sears/Kmart corporate headquarters that Kmart store 7353 in Johnson City would be shuttered, a new excitement surrounding the future of that piece of land has arisen. If, as the old joke goes, the three most important factors in real estate are location, location and location, then the lot at the junction of Interstate 26 and State of Franklin Road checks all three boxes.
The purchase price for Kmart’s 20.33 acre lot in 1994 was $12,393,812, according to property transfer records. But the most recent appraisal of the property, conducted in 2014, shows a total market value of $8,532,800. According to those figures, the land market value is $6,632,700 and value for improvements (the building, parking lot, lighting, landscaping, etc.) is $1,900,100, according to the state comptroller.
The current building is 172, 251 square feet, but is also more than 20 years old and could be razed to make way for more contemporary space. The expected sale of the property marks the second time the lot has generated significant excitement. In 1994, it was considered the gateway to a new era of prosperity. At that time, as the city’s growth pattern was taking retail and restaurant businesses beyond their heritage locations on North Roan Street, the construction of a Super Kmart on “Washington County Lot 037E” served as the watershed moment that opened the North State of Franklin corridor to development beyond planned med-tech.
As time has passed and retail shopping patterns have changed, however, the lot’s importance has dwindled along with its contributions to the local sales tax coffers. Kmart demoted the store from Super Kmart to regular Kmart status years ago, and the location’s fortunes have mirrored the downward spiral of Sears/Kmart’s national status. The Johnson City store is one of 72 slated to close.