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Why Family Video’s owner isn’t actually going anywhere

Nearly 60 Family Video locations in Michigan are closing next month as the suburban Chicago-based parent company shutters all of its video rental locations and liquidates over the next several weeks.

Yet the Hoogland family who owns the chain of more than 250 video and video game rental shops nationwide isn’t likely to leave in their wake a bunch of vacant storefronts peppered across the region and state.

That’s because they still own — and probably will continue to own, at least for the time being — the real estate the stores were in.

That strategy — owning its properties rather than leasing them — was one of the reasons the company told me two years ago that they were able to hold on for as long as they did in an industry that has been made all but extinct by streaming TV and movie services and other issues. It was preceded in death by the likes of Blockbuster, Hollywood Video and Movie Gallery.

That also means that the Hooglands have a vested interest in making sure that there aren’t a bunch of empty storefronts where Family Videos once were.

After all, no tenant, no rent.

Tjader Gerdom, principal of Northville-based Gerdom Realty & Investment, which worked with Family Video on a series of real estate deals over the years, said things like urgent cares and other uses would be strong contenders to fill the spaces once they are vacated.

“He (Keith Hoogland) was always tough on us when it came to new stores because it was important to be on the corner and be available to the neighborhoods, usually corners with (traffic signals) and everything else,” Gerdom said. “I think they will backfill relatively easily.”

In recent years, Family Video has been pivoting. You could mellow out and buy CBD there. They put Marco’s Pizza shops and Stay Fit 24 gyms — both of which were tied to the Hoogland family — in their buildings as the video stores’ footprints shrank.

The announcement by parent company Highland Ventures Ltd. on Tuesday evening says that declining foot traffic due to COVID-19 as well as lack of movie releases spelled the end of the family owned video store, which had been around for more than 40 years and had as many as 800 locations at its peak.

“I am extremely thankful to our employees and customers that were instrumental in Family Video’s success. Without you, we would not have been the last man standing in our industry,” Keith Hoogland said in his announcement. “While we are disappointed in the closing of Family Video, we will remain tied to our communities through our Legacy Commercial Property division, owning and managing buildings in the community.”

Even in the two years since I wrote about Family Video, the company has undergone a dramatic footprint reduction. At that time, it had 109 stores in the state, with 19 of them in Metro Detroit. As of yesterday, there were just 58, with 10 in Metro Detroit (see box).

I emailed the company’s head of real estate, Sam Stilp, this morning to talk more about the closures but haven’t yet heard back. As of January 2019, its 109 Michigan stores totaled 511,270 square feet in real estate valued at $91 million. Its 138,057 square feet of real estate across 22 properties was valued at $22 million at the time.


Posted By: Crain’s Detroit Business on January 6, 2021.  For more information, please click here to read the source article.

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