A closing Borders
Online shopping, steep Manhattan rents and tight margins are changing the face of New York City’s big-box retail chains, according to the Wall Street Journal. Now that Borders is gone and with Circuit City, Best Buy and Barnes & Noble scaling back, landlords are readapting their buildings for smaller tenants. [more]
Walgreens has signed a deal for 22,000 feet of retail space at 100 Broadway for an annual rent of $2 million, the New York Observer reported. The Lower Manhattan space, just blocks from Zuccotti Park, had been conspicuously vacant following the departure of Borders, which filed for bankruptcy earlier this year. The new store could become a Walgreens or a Duane Reade — the rival drugstore chain that Walgreens purchased last year. Not everyone was pleased about the space going to the parent company of one of New York City’s most ubiquitous tenants.
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The first auction for Borders stores scheduled for today was
cancelled after the company received two bids for a store in Georgia and
one qualified bid each for seven other stores that had been slated for the first round, according to a statement released by lawyers for
Borders yesterday. While there will be a telephone auction for that
store, the auction for the second round of stores is still
scheduled to take place Sept.13. As previously reported, the
first group contains mainly leases that must be assumed or broken by
Sept. 30, as well as leases for some smaller stores, while the second
group contains leases that do not fall into those categories.
– Miranda Neubauer [more]
In walkable urban areas, the outcome of the closure of chain stores
such as Borders can be positive, Chris Leinberger from the
Brookings Institution told NPR. In some cases, he said, Borders stores
have been taken over by restaurants that are open 24 hours. Other
spaces could be replaced by smaller boutiques. He explained that in
places where Borders or another chain is an anchor store, a closure
could have an impact on surrounding locations, especially when the
aim of a so-called anchor store was to draw people to a location.
As The Real Deal previously reported, interest in Manhattan Borders stores is expected to be high. [more]
Borders has received court permission to auction its name and real estate assets, as it continues to go through its liquidation process, Reuters reported. A U.S. bankruptcy judge gave Borders permission to split its remaining leases into two groups and hold auctions for them Aug. 31 and Sept. 13. The first group comprises mainly leases that must be assumed or broken by Sept. 30, as well as leases for some smaller stores. All leases that do not fall into those categories would then be auctioned in the second round. Hearings to approve the auction results would be scheduled for Sept. 8 and Sept. 20, respectively.
Borders agreed to extend the deadlines after more than 20 landlords and landlord groups complained that the initial plan gave them too little time to evaluate if buyers could meet the obligations of the acquired leases. [more]
A Books-A-Million store and a Borders store
Books-A-Million has withdrawn its bid to purchase 30 of the Borders Group’s retail spaces after the two companies failed to agree on terms and going out of business sales at certain locations, Bloomberg News reported.
“We worked exhaustively in an effort to acquire these stores and reach agreements with all of the parties whose consent was necessary,” Books-A-Million CEO Clyde Anderson said. “Unfortunately, we were unsuccessful.”
Alabama-based Books-A-Million offered to buy 21 super-stores and nine smaller ones July 21, the day that Borders got approval from bankruptcy courts to liquidate all its assets.
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Even as traditional bookstores are closing (Borders began its liquidation sales today), privately funded “micro-libraries” are cropping up across the city, the Wall Street Journal reported. In Williamsburg, the doghouse-like Corner Library stands four feet tall at the corner of Leonard and Withers streets and contains instructions on how to become a member on its padlocked door. Founded by 31-year-old artist Colin McMullan, the library offers books, zines, cycling maps and other curiosities, and already has 20 to 30 members. [more]
Earlier this week official word came down that Borders Group would be
closing its remaining 300 retail outlets, two of which are prized retail
spaces in Manhattan, so it should come as no surprise that suitors for
the soon-to-be available spaces at Columbus Circle and Herald Square
are swooning.
“I can’t say anything in detail but yes, there is lots of interest,” said
James Avallone, senior managing director of Melville, N.Y.-based DJM
Realty, which was hired to handle the liquidation and lease transfers of Borders’ 399
remaining real estate holdings in the United States. [more]
Borders Group has hired New York-based DJM Realty to manage the disposition of all its remaining stores in the United States, Business First reported. The bookstore chain, which filed for Chapter 11 bankruptcy in February, intends to liquidate all stores after a bankruptcy auction scheduled for yesterday failed to attract sufficient bids.
It will ask a court tomorrow for permission to liquidate and may start closing stores as early as Friday. In total, Borders has 399 stores and 258 remaining leases available for assignment.
“This group of Borders’ stores has generated very strong interest from retailers,” Andy Graiser, co-president of DJM Realty, said in a statement. “With a lack of new real estate development and restrictive barriers of entry in several key markets, surplus real estate like Borders becomes a very good opportunity for a number of growing retailers looking to open for business during the next four to 12 months.” [more]
Borders will likely close 51 locations, including those at JFK airport and Penn Station, by June 22 to avoid defaulting on its bankruptcy loan, Crain’s reported. Borders hasn’t been able to negotiate extensions from landlords at those locations on deadlines to assume or reject the leases. Borders’ creditors, led by GE Capital, said they would not allow the bookstore chain to assume the leases itself. In the meantime, Borders will seek permission to sell furniture and equipment from those stores through a liquidator, while asking lenders to grant a grace period until July 21, when Borders goes to court to potentially close on the sale of the entire business. [more]
