Orange County's retail vacancy is low overall, 3.3% in the third quarter of 2026 by Kidder Mathews' count, but the vacant space it does have is concentrated in big boxes. Marcus & Millichap put drug store vacancy at 8.5% and department store vacancy at 9.4% in June 2026. Rite Aid's wind-down, Walgreens' store cuts, and the bankruptcies of 99 Cents Only, Big Lots, Joann and Party City each left Orange County centers with an empty anchor or junior anchor. Amazon also closed its Amazon Fresh store in Mission Viejo in late 2025 (Supermarket News).
Those boxes are leasing, but mostly not to the retailers that left. CBRE wrote that Orange County's Q2 2026 leasing absorbed space vacated by retailer bankruptcies, and Lee & Associates reported that entertainment and recreation users led big-box leasing. The pattern is clear in the deals below.
Recent Orange County backfills
| New tenant | Former tenant | Size | Where | Source |
|---|---|---|---|---|
| The Picklr (indoor pickleball) | Bed Bath & Beyond | about 27,000 SF | 22235 El Paseo, Rancho Santa Margarita | OCBJ, Apr 2026 |
| The Picklr | Rite Aid | about 19,000 SF | 17904 Magnolia St, Fountain Valley | OCBJ, Apr 2026 |
| Sprouts Farmers Market | 99 Cents Only | 25,860 SF | Bristol Warner Village, 2311 S. Bristol St, Santa Ana | NewMark Merrill, Jun 2025 |
| Goodwill of Orange County | Big Lots | 13,156 SF | 1821 N. Tustin St, Orange | Connect CRE, Nov 2023 |
| Lucky Strike (bowling and entertainment) | not stated | 38,000 SF | The Commons, Laguna Hills | Lee & Associates, Q2 2026 |
| LV Furniture Collection and Dumos Home | not stated | 110,266 SF | Foothill Ranch Towne Centre, Lake Forest | Lee & Associates, Q2 2026 |
| 24 Hour Fitness | not stated | 26,670 SF | 200 Corporate Dr, Rancho Santa Margarita / Ladera Ranch area | Kidder Mathews, Q3 2026 |
Dollar Tree also took over a group of former 99 Cents Only leases in Southern California, including bids on 11 Orange County stores (OCBJ, June 2024).
What each kind of user needs from the box
Fitness and recreation
Clear-span floor with few columns, ceiling height for courts or equipment, heavy parking demand in the evenings, showers and restrooms. Many cities treat gyms as a use that needs a permit or a parking review.
Entertainment
Big floor plate and ceiling height, an alcohol license for food and drink, parking that peaks at night and on weekends, and signage on the main road.
Grocery
Loading dock, heavy electrical for refrigeration, room for a cooler and back-of-house, and a strong co-tenant mix. Check existing grocery exclusives in other tenants' leases before you talk to one.
Off-price and discount
Large open sales floor, a loading area, good visibility, and lease terms that work at value-retail rents.
Medical and dental
Plumbing to many rooms, accessible parking close to the door, and in some cities a use permit. Often a better fit for part of a box than the whole thing.
One user, or split it?
The deals above show both paths. The Picklr took former Bed Bath & Beyond and Rite Aid boxes whole, at about $1.5 million of conversion per site according to OCBJ. Other owners demise a box into two or three suites so they can lease to a grocer, a medical group and a fitness studio at once. Splitting reaches more tenants, but each new suite needs its own storefront, utilities and HVAC, and the result has to fit the center's parking and the other tenants' leases.
Illustration of one way to split a former anchor.
The owner's checklist
- 01
Find out where the old lease stands
In a bankruptcy, the tenant can reject the lease or assume it and assign it to a buyer. For shopping center leases, the Bankruptcy Code requires adequate assurance that an assignment will not break the lease's use, radius, exclusive or tenant-mix terms (11 U.S.C. 365(b)(3)). Your attorney should follow the case so you know whether the space is coming back to you, and when. Read section 365.
- 02
Read the restrictions before you market it
Exclusives in other tenants' leases, prohibited uses, and any reciprocal easement agreement (REA) or CC&Rs can rule out a gym, a grocer or an entertainment use. Parking limits in the REA matter most for fitness and entertainment.
- 03
Check co-tenancy in the other leases
An anchor going dark can let other tenants pay reduced rent or terminate. Know your deadline to replace the anchor, and whether the replacement has to be a certain size or type.
- 04
Decide: one user or a split
A whole box narrows you to the few users that size fits. Splitting into two or three suites widens the pool but costs demising walls, new storefronts, separate utilities and HVAC. Price both before you pick.
- 05
Confirm the city's path for the use
Many Orange County cities require a conditional use permit or a parking review for gyms, entertainment, schools and some medical uses. A planner call before the letter of intent saves months later.
- 06
Market it to the users that are signing
Fitness, recreation, entertainment, grocery, off-price and medical groups, plus the tenant brokers who represent them. Show ceiling height, power, loading and parking counts up front; those are the first questions.
The rest of the owner's numbers are in our Q3 2026 market report for owners, and city-by-city asking rents are in retail lease rates by city.
Questions
Who is leasing former drug stores and big boxes in Orange County?
In 2025 and 2026, fitness and recreation users such as The Picklr and 24 Hour Fitness, entertainment users such as Lucky Strike, grocers such as Sprouts, and off-price and home retailers such as Burlington and LV Furniture Collection have taken former anchor space in Orange County.
Should an owner split a vacant anchor into smaller suites?
Sometimes. Splitting widens the pool of tenants but costs demising walls, storefronts, separate utilities and HVAC, and can trigger co-tenancy or REA issues. Compare the rent and timing of a single user against a split, including the conversion cost, before deciding.
This guide is general information, not legal advice. Bankruptcy, lease and land use questions belong with your attorney.
Have a dark box or a big vacancy?
We will tell you who would take it
Send the size, the center and what is left in the space. We reply with the users we would target, whether to split it, and a rent range.