When property owners and lessees go bankrupt, real estate has a way of bouncing back. After all, a warehouse for one company can easily serve as a warehouse for its competitor. And an office building can house any number of companies.

But what happens to old theaters when they die? We've all seen abandoned movie houses in old downtown areas and imagined the days when they teemed with noisy children throwing popcorn at Superman serials.

Today's movie theaters, however, are a different story. Often attached to shopping malls or sitting near major intersections, many theaters built in the 1970s and 1980s soon may be marked for closing. But now, it's suggested, the great locations enjoyed by many of these theaters may result in creative new uses for seemingly lifeless assets.

"The real estate industry has a long history of breathing new life into seemingly 'dead' assets, most recently in the adaptive reuse of surplus bank branches," said Dale Reiss, global leader of Ernst & Young's Real Estate Practice. "Theater owners now have real opportunities to partner with real estate developers and investors in finding new uses for some of their defunct properties."

In the mid- to late-1990s, movie theater companies embarked on a spending spree. They constructed scores of new high-end theaters featuring 10 or more screens, stadium seating and digital sound.

Between 1990 and 1999, the number of movie screens nationwide increased 56 percent, from just under 24,000 to more than 37,000, according to the National Association of Theater Owners.

But at the same time, movie attendance has fallen. In 1999, the number of theater admissions totaled 1.5 billion -- the same number as in 1948. Ticket sales have dropped in the last two years, prices have gone up, and older movie theaters locked into long-term leases have remained in operation.

As a result of the movie screen oversupply, analysts estimate that between 10 percent and 15 percent of the country's 7,500 movie theaters will have to close.

That translates into between 750 and 1,125 empty theaters, most of them in urban areas.

"These properties may no longer have value as theaters, but they could have value as other types of facilities," Reiss said. "The good news is that since real estate is all about location, and these theaters typically are in prime locations in large population centers, the same theaters that once drew movie goers could attract a diverse new base of consumers, like students, shoppers, or fitness buffs seeking a whole new range of goods and services.

"In fact, they can be renovated and repositioned for a variety of community, educational, recreational, commercial, retail and other uses," she added.

In Raleigh-Durham, N.C., a former theater is being converted into a huge fitness center. In other communities, developers are looking at opportunities to convert theaters into big-box retail outlets, storage facilities, supermarkets and many other uses.

And in some places, community leaders, theater owners, real estate investors and government agencies have partnered in the renovation and conversion of historic theaters to new uses such as performing arts centers.

A new company called Enterprise Broadcasting Corporation has made plans to use high-definition video to sell high-end luxury items and services. Enterprise wants to broadcast sales information to specially equipped theaters in upscale malls throughout the country.

In addition, the company is interested in creating a new breed of distance learning centers built around closed movie houses.

"Although real estate is a fixed asset, it can be highly adaptable," Reiss said. "Owners should explore their options and consider the opportunities in finding new uses for their properties. They won't be the first to see an opportunity in the challenge. Ask the bankers."

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