Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
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RET AILING TODA Y Life after Borders LANDLORDS ARE FINDING VARIOUS WAYS TO FILL EMPTY BOOKSTORE SPACE By Renée DeGross Valdés T 42 SCT / MAY 2012 HIS WAS NO BLACK FRIDAY CROWD standing in line outside a store in the Los Angeles suburb of Sherman Oaks two months ago. No, it was only March, and no mild or sunny day either, but a rainstormy Sunday. Still, about 100 showed up at this grand reopening of a former Borders store as a T.J.Maxx. Perhaps it was apropos. When Borders filed for bankruptcy protection in February 2011, the company left 400 stores on the chopping block. At its liqui- dation last summer, 200 more stores went dark. As it happens, prime locations like this Sherman Oaks site have leased out quickly to opportunistic retailers like T.J.Maxx, which has man- aged to thrive in this difficult economy. To be sure, healthier booksellers have proved eager for these vacant Borders sites. Books-A-Million leased out 41 of them, and Barnes & Noble grabbed up a number too, plus the Borders online do- main. But other types of businesses and organizations have gotten in on this, even institutions of higher learning: Vanderbilt University, in Tennessee, and Fairfield University, Connecticut, each turned a former Borders into a campus bookstore. Whole Foods has taken several, in- cluding in Mission Valley, Calif. There, a bidding war broke out for the old Bor- ders space, according to Spence Mehl, general counsel of New York City– based RCS Real Estate Advisors, which was involved with the deal. Walgreens plans to open a drugstore in a vacant 24,000-square-foot Borders in Boston. It is anyone's guess just how much vacant Borders space is still available, but whatever is left is problematic real estate, experts say. "Borders had good real estate, but it was challenged," Mehl said. "A lot of it was on two floors, which doesn't work for most retailers." Houston is an example. Since the URBAN OUTFITTERS AND GUITAR CENTER WILL SPLIT A FORMER BORDERS STORE IN EMERYVILLE, CALIF. onset of the recession, that market has developed precious little real estate, less than at any other time over the past 30 years, according to Jason Baker, a partner at Baker Katz, a Houston-based real es- tate brokerage firm. And yet, five Borders stores sit empty. Baker says he believes the Dallas market is in a similar state. "This has been a real head-scratcher," said Baker. "The biggest challenge, without a