Not only are three of New York’s eight Borders stores closing–news passed along after Borders’ anticipated filing of Chapter 11–but projections from the CoStar group foresee vacancy rates for nearby retailers to increase.
Basically, Borders has the flu, and now nearby stores can expect to catch a cold.
The CoStar projections see vacancy rates climbing from 4.2 percent to 9.5 percent for shopping centers that rely on Borders as their anchor, much higher than the national average of 7.2 percent.
If the whole concept of “shopping centers” and “anchors” seems… well… suburban, the effect is not population-specific, and, with some of the country’s most sought-after real estate, New York stories will take a hit. “Another way to think about the population is that, naturally, we all think that it’s the stores located in markets with the lower density that would close. But that’s not the only factor they take into account,” said Chris Macke, senior real estate strategist for CoStar. “A lot of this is going to be location-specific in each market.”
Mr. Macke cites the case of a downtown Indianapolis Borders that, despite being in a vibrant retail area, is on the list because of it’s close proximity to a large mall.
And, again, while New York certainly isn’t Indianapolis, even stores that aren’t around an anchor Borders will be hit.
“Certainly, if it is the anchor it has a greater effect,” Mr. Macke said. “The bookstores are very desireable because of the affluence level of the shopper they draw. If you can bring in people at a higher income level, then that has real value.”
The New York Borders that are closing are at 461 Park Avenue, 576 Second Avenue and 100 Broadway. The survivors on the island of Manhattan are near Penn Station and in the Time Warner Center. Of the other three citywide, one is in JFK, one in LaGuardia and the other on Staten Island.