Months after Toy R Us sought to liquidate its holdings in the United States, merchants have taken up space left behind by the toy retailer. The buildings are said to have modest rents and longer leases in comparison to modern-day standards, The Wall Street Journal reported.
Green Street Advisors, a real estate research firm, wrote in a note, “Many Toys R Us leases have significant remaining term at rents that are well below market.”
A&G Realty Partners brokerage Co-President Emilio Amendola reportedly sold 209 of the retailer’s sites at auctions. “It’s a great showing,” he told the paper. “If you sold 10 percent, you’d be dancing in the streets.”
Ollie’s Bargain Outlet Holdings, for example, opened the doors to a location in Maryland that was home to Toys R Us in the past. The company’s President and Chief Executive Officer Mark Butler noted that many of the former retailer’s locations were in close proximity to highways and that the stores were the correct size for his brand at roughly 31,000 to 46,000 square feet.
The news comes months after it was reported that retailers in the hobby and off-price segments may fill some of the larger empty, big-box spaces left behind by the closure of Toys R Us stores. Companies such as Ashley Homestore and Big Lots had bid on the properties in bankruptcy court. But one hobby retailer was particularly interested in Toys R Us’ former stores.
“Hobby Lobby especially is very aggressive,” Kimco Realty Chief Executive Conor Flynn said at a conference earlier this year. The retailer had arrived at a store count of 800 as of January, and, in June, it had built seven new stores.
Beyond Hobby Lobby, Flynn noted that Burlington Stores and other companies looking to grow include “traditional grocers, the larger fitness players — those really are the stores that continue to want to expand in that category.”
Date: January 3, 2019