Whitney Woodworth, Salem Statesman Journal
June 2, 2025
The first half of 2025 brought a string of big retail and restaurant closures to Salem.
Macy’s, Office Depot, Family Dollar/Dollar Tree, Rite Aid, the downtown Bo & Vine and Regal Cinebarre, Joann Fabric and Crafts and Craft Warehouse announced closures or shuttered locations within the span of six months.
Longtime Salem mainstays like the RAM Restaurant and Brewery, Rudy’s Steakhouse and Court Street Dairy have also closed in the past year.
Closures led to vacant space, lost jobs and growing concern about the economic climate in Oregon’s capital city.
Vacancy rates have been most noticeable in east Salem and downtown.
Experts said the trend does not spell doom for the Salem retail market.
The closures of big-box stores like Macy’s, Rite Aid and Joann are part of nationwide closures and bankruptcies.
“I think that has more to do with people’s buying patterns,” said Nick Williams, a senior advisor with SVN Commercial Advisors. “That’s not exclusively a Salem issue.”
Salem Area Chamber of Commerce CEO Tom Hoffert said in an email local businesses recognize the challenges and opportunities in downtown Salem.
“Large retail, nationally and locally, is impacted by the new digital economy, essentially the impact of the macro-offerings online and by Amazon,” he said.
Fortunately, the area is seeing some positive developments, Hoffert added.
Businesses are adjusting to the changing retail landscape by shifting into smaller spaces, offering events and hybrid models.
Restaurants have also quickly moved into vacant downtown spots after closures or relocations. Other empty spaces are being reimagined as art studios, galleries and boutiques.
Vacancy rates healthy but vary depending on location in Salem
Vacancy rates — the percentage of unoccupied retail spaces like shops and restaurants — can be one of the indicators of a region’s economic health.
A vacancy rate below 5% is typically considered good.
In Salem, the vacancy rate is 4.3%. This is lower than Portland’s 6% rate but higher than Boise’s 3.9%.
The numbers only tell part of the story, Williams said.
Whereas construction is booming in places like Boise, no retail construction is underway in Salem.
Salem’s rate a year ago was 3.5%.
Year-over-year, 118,000 square feet of retail space leases ended or were terminated, putting that back in the market, Williams said.
“That is an indicator of … the hope that there is in the local economy,” Williams said.
The rates can vary depending on which area of Salem you look at, he added.
The 97302 zip code in south Salem has a vacancy rate of 2.5%.
The 97305 area code has a rate of 5.3%. Vacancies in that area of east Salem include the empty Big Lots on Lancaster Drive.
The 97301 zip code that includes downtown, which has seen several big-box closures, has the highest neighborhood vacancy rate at 5.8%.
The empty JCPenney building, closed Rite Aid and shuttered Macy’s contribute to a big chunk of vacant square footage concentrated in the downtown core.
Downtown Salem hones in on revitalization
Some departing tenants have pointed to safety concerns and shoplifting losses as their reason for leaving downtown.
A downtown safety district tax could help reverse this trend, Williams said.
In 2024, Salem Police disbanded a proactive community policing team due to budget cuts and staffing levels that would deploy on bicycles downtown.
“As a community, we need to rally around the safety and cleanliness of our downtown — not just for the merchants and business owners, but also for the customers who enjoy their offerings,” Hoffert said.
New businesses are still opening and investing money in hopes of transforming downtown.
Restaurants are also quickly moving into some spots left vacant by closures and relocations. Within a few months, Spicee Bite, Adobe Restaurant and Bar and Syrian Chef Restaurant opened at empty storefronts downtown.
Empty spaces are also being reimagined as art studios, galleries and boutiques.
Pottery art studio Clay & Kiln Collective opened in a vacant space on Commercial Street, Stefani Art Gallery opened in the former Winslow Boutique and Winslow Boutique relocated to the renovated former Whitlock’s building.
The husband and wife owners of Clay & Kiln said recent development activity on Commercial Street, at the Forge to the east and the history of the building that houses their studio drew them to downtown.
The owners of the recently renovated portion of the McGilchrist Roth building south of Liberty at State Street said they want to keep the storied history of the building and bring people back to the heart of Salem.
The spot is open to a variety of tenants, including offices, services, retail or restaurants.
Williams recognized there is still “some excitement” for downtown, citing the redevelopment of Liberty Plaza into the Forge by Clutch Industries.
“A forge is where you create things, and we are trying to create things downtown,” Clutch Industries founder and owner Chris Blackburn told the Statesman Journal in 2024.
He hoped it would be a catalyst for change.
The Forge is turning the large mall space into small microsuites for salons, ground-floor retail, restaurants and offices.
Hoffert also pointed to the redevelopment of the Forge, Salem Center and Macy’s as promising developments that could complement the downtown ecosystem.
Salem retail already shifting to smaller spaces
Across the street from the Forge, a group of local investors who bought the Salem Center mall in 2024 are working to sign on new tenants and revitalize the mall with events and activities.
Co-owner Kelly McDonald said when they learned Macy’s planned to close its longtime store at the mall, they purchased the building and leased it back to the department store until its closure earlier in 2025.
McDonald told the Statesman Journal they plan to convert the big box layout into a spot offering family entertainment, food and beverages.
Williams said Salem has been ahead of the curve on a national trend of businesses shifting into smaller spaces.
The average lease size in Salem is less than 1,000 square feet.
In neighboring state capital cities in Idaho and Washington, the average is about 3,000 square feet in Boise and around 9,000 square feet in Olympia.
“Those are big chunks, when one of those (businesses) closes down,” he said. “In Salem, it seems as though businesses are right-sizing from the start.”
He also said successful businesses are adapting to the changing retail landscape by offering hybrid in-person and online storefronts or by hosting events to get foot traffic. One example is the clinics, runs and events hosted by downtown business Gallagher Fitness Resources.
“I don’t know that walk-in traffic is ever going to come back to the level that it was 10 or 15 or 20 years ago,” Williams said.
He said the businesses that will have more “staying power” are the ones trying out-of-the-box ideas for events or including multiple ways people can interact with the business.
Hoffert echoed that sentiment.
“I believe we will see more non-traditional uses within former retail spaces based on experiences and culture,” he said. “From pickleball courts and art galleries to community spaces and business collectives, each intending to draw people in to experience art, sports, music, culture, performances and plays, and general entertainment.”
For questions, comments and news tips, email reporter Whitney Woodworth at wmwoodworth@statesmanjournal.com, call 503-910-6616 or follow on X at @wmwoodworth
