More than half of the surveyed stores closed by some of the nation’s largest big-box retailers in 2008 and 2009 remain vacant, according to a Colliers International report cited by the Wall Street Journal. The survey examined 233 of the 1,259 stores closed by Circuit City, Linens n’ Things, Mervyn’s and Gottshcalks, and found that replacement tenants in the large retail centers paid 17.9 percent less per month than their closed predecessors. That survey is a microcosm of the big-box retail landscape as a whole, where vacancy rates declined to 7 percent in the first quarter of 2011 — down from the 7.5 percent highs in early 2010 — but only because rent has declined 6.4 percent since the second quarter of 2008, according to a separate report released by Reis. Landlords are struggling to balance the costs associated with signing big retail tenants for substantially smaller rents and those associated with anchor vacancies causing other stores to vacate the outdoor shopping centers. Comments

Fifth Avenue

From the October issue: Fifth Avenue in the 40s is in retail flux. Nearly a dozen spaces on the
10-block stretch are vacant or on the market, including the former
Circuit City store and the former indoor mall at 575 Fifth Avenue and
47th Street. Meanwhile, new tenants like LittleMissMatched, the upscale
children’s apparel store, have recently entered the area. The strip includes the gateway to the Diamond District, along with the
eastern edge of Rockefeller Center, and is dotted with camera and
souvenir shops, as well as low-end food merchants. It has long been the
dowdy stepsister to Fifth Avenue in the 50s, which is lined with tony
tenants such as Saks Fifth Avenue, Tiffany and Bergdorf Goodman. But in recent years, the stretch started attracting higher-end retail
tenants, such as American Girl Place, Build-A-Bear and Aldo, the shoe
store. In fact, many expected it to keep getting fancier. [more]

Against the odds, Union Square retail businesses have been thriving in the recession, even as some of New York City’s most venerated shopping areas struggle. Fifth Avenue, Times Square and Soho, all long-time shopping havens, have all seen retail vacancies hit 10 percent or higher this year. But even as Circuit City and the Virgin Megastore vacated the Union Square neighborhood after the chain went bankrupt earlier this year, two new chains, Nordstrom Rack and Best Buy, announced they’d be moving in. Rachel Meltzer, a researcher with the NYU Furman Center for Real Estate and Urban Policy, said that foot traffic in the area has risen 59 percent in the last five years, a key component to the neighborhood’s success. “I don’t think it’s considered a transportation corridor anymore so much as a destination,” Meltzer said.

From the August issue: Finding new tenants for many of Circuit City’s old stores is proving to
be a challenge for the brokers and landlords who are marketing sites in
Manhattan and Brooklyn.
After filing for bankruptcy at the end of last year, the
electronics giant announced in January that it was going out of
business, and by March it had shuttered all 567 of its stores
nationwide, including nearly a dozen in New York. Now, five months after that shutdown, four sites in Manhattan and three in Brooklyn remain vacant.
The spaces formerly occupied by Circuit City, which entered the New
York market in 1997 and was one of a number of national mega-retailers
to go belly up this year, are something of a case study of the New York
City retail market. [more]

Noyack Medical Partners’ CJ Follini (left) and Corcoran’s Paul Wexler

Like many other segments of the commercial market, health care real estate is in a “wait-and-see” mode right now — but not just because of the economy. The Obama administration’s proposed health care reforms could lead to significant changes in health care facilities, and consequently in real estate, CJ Follini, managing principal at Noyack Medical Partners, told about 30 attendees at a Real Estate Board of New York seminar this morning. “If you think housing is the most important thing [for the economy right now], you’re wrong,” said Follini, who founded Noyack, which acquires and manages health care real estate. “It’s health care.” [more]

Several large retail spaces that have come onto the market following bankruptcies are being leased, the New York Post reported. Raymour & Flanigan, a furniture retailer, has signed a lease for a 33,000-square-foot store at 1961 Broadway, at the corner of West 66th Street, part of a larger space that housed the former Tower Records, and was most recently occupied by Circuit City. R&F waited for bankruptcy court proceedings to be completed for the space so that they could negotiate a lower rent with the building’s owner, Millennium Partners. The asking rent for a 10-year lease was $4 million, which works out to $100 per square foot on the second floor and $300 per square foot on the ground floor. [more]

Nordstrom Rack, a discount unit of retailer Nordstrom, will open at One Union Square South, occupying 32,136 square feet on the lower level of the former Virgin Megastore space, according to a press release from Nordstrom. The store, the first Nordstrom Rack in Manhattan, is slated to open in spring 2010. The terms of Nordstrom’s lease were not disclosed, but The Real Deal reported in March that retail space facing Union Square Park usually commands $400 per square foot and the Virgin Megastore space could rent for even more. Best Buy is also coming to One Union Square South and is expected to open a 46,000-square-foot store in the former Circuit City space during the fourth quarter of this year. TRD [more]

Tommy Hilfiger and Virgin Megastore in Union Square

Clothing retailer Tommy Hilfiger is rumored to be shopping for retail
space in Union Square and may be considering a “concept store” in the
area. He is said to have looked at the former Circuit City space and at
the Virgin Megastore’s soon-to-be-vacant space on Union Square South.
Wal-Mart, Best Buy and Nordstrom have also reportedly looked at the
storefronts, which are controlled by the Related Companies and are
being marketed by Winick Realty Group. Filene’s Basement’s bankruptcy
filing could leave another vacant store in the area. [more]