Dollar Tree site near R Street marketed for new tenants

A retail building near the R Street Corridor in Sacramento is being marketed for a new direction, with the current tenant planning to exit by year’s end after a decade there.

Dollar Tree has chosen not to renew its lease at 1235 S St., a 9,100-square-foot, single-story building, according to Scott Kingston of Turton Commercial Real Estate.

“From the feedback we’re hearing from neighbors and other brokers, they’re excited about a different tenant in that space,” said Kingston, whose firm has the listing for new leases there.

Kingston said his brokerage is marketing two new directions for the building. One would be to split the square footage into space for multiple retail tenants, similar to what’s been done with buildings on nearby R Street at 12th and 15th streets.

Most urban retail locations are 2,000 to 4,000 square feet, so the current size would be unlikely to get a single store or restaurant use.

The other option would be to convert the building to creative office space, also likely for more than one user. There’s also about 20 parking stalls for the building, which dates to 1946.

At this point, he said, the owner is not envisioning a full-scale redevelopment of the site, such as creating a multistory building of apartments over retail.

“Based off the opportunities and activity there has been in the last few months, we’re very optimistic,” Kingston said of finding new tenants.

In that period, both inquiries and building tours have gone up compared to earlier in the year or most of 2020, he said. He added Turton Commercial has probably helped sign about 150,000 square feet of new office and retail leases in the urban core in recent weeks, another sign market confidence is rising.

Any tenant who signs on now likely wouldn’t be able to occupy the building until early or spring 2022, Kingston said. By then, the specter of Covid-19 should have largely passed.

In addition to Turton Vice President Kingston, Ken Turton and Jon Lang of Turton Commercial are listing the building for lease.

Dollar Tree Inc. (Nasdaq: DLTR) did not respond to a message last week seeking more information on the S Street store’s pending closure. The Chesapeake, Virginia-based company also closed a store recently at 1895 Howe Ave. in Sacramento.

Last year, the William L Gekakis Trust, with a Burlingame address, bought 1235 S St. for $2.25 million.