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Prospects bright for Borders replacements

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Former big-box locations for Linens & Things, Circuit City and Cub Foods remained vacant for years and in a few instances continue to languish on the local real estate market.

So the liquidation of bookstore chain Borders Group Inc., which will dump another three big-box retail spaces onto a local market with three other vacant Borders stores, seems pretty ominous.

But local commercial real estate brokers say replacing Borders won't be as cumbersome since the chain carefully chose its real estate, opting for locations near concentrations of affluent and educated consumers. At least four of the six Borders locations should be strong enough to quickly land a replacement or replacements, and the outlook for the other two isn't shabby, either.

The Borders stores at Castleton Square Mall in Indianapolis and Hamilton Town Center in Noblesville (both of which are set to close as part of the Michigan-based chain's liquidation) sit at the front door of successful malls, the River Crossing store (already closed) is next door to The Fashion Mall at Keystone, and the former downtown Borders stands at the prime corner of Washington and Meridian streets.

The stores range in size from about 23,000 square feet to 33,000 square feet.

"They're some of the best retail positions in the city," said Bryan Chandler, principal at locally based Eclipse Real Estate. "These are all competitive environments, and there will be users for these boxes."

Borders stores in Greenwood and Carmel could take a little longer to fill since they sit outside the epicenter of their respective trade areas, but the spaces remains viable based on demographics and visibility, said Connie Niessink, a principal at locally based Niessink Commercial Real Estate.

The Greenwood store sits at U.S. 31 and Shelby Street, and the Carmel store is at Keystone Avenue and 116th Street across from Merchants' Square.

"I always hate to see any retailer go out of business because it reduces competition in the category," Niessink said. "On the other hand, because development has slowed, quality real estate is not abundant in Indianapolis. Whenever a retailer leaves a quality box behind, it's a great opportunity for somebody else."

Among the retailers expected to consider the Borders spaces are Dick's Sporting Goods, Best Buy and Books-A-Million, said John Bemis, the director of leasing at Chicago-based Jones Lang LaSalle, in an interview with Bloomberg News.

Dick's already has stores at Castleton Square and Hamilton Town Center, and Best Buy has a store adjacent to Castleton Square. Alabama-based Books-A-Million has just one local store, at Traders Point.

Bookstore competitor Barnes & Noble also may look to upgrade its real estate.

The liquidators that bought the remains of Borders plan to auction off the company's remaining leases later this summer or early in the fall.

Buyers would essentially sublease the space and continue paying rent to landlords. Borders had rejected the leases for stores it already closed, putting landlords back in control of the real estate.

The rationale for bidding, locally at least, likely would boil down to controlling the real estate, since Borders was paying market or higher rents, said Niessink.

She said Simon Property Group, which manages Castleton Square and Hamilton Town Center, would be watching the auction closely.

"For these boxes, for the most part, it's just a matter of time," Niessink said. "Good quality retail space in Indianapolis has never had a hard time leasing back up."

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  • southside Borders
    You took the words right out of my mouth, John. Are companies like B&N or Books a Million (a poor man's alternative, if you ask me) really looking to expand that much in this economy?
  • Right
    I'm not sure I'm buying this the Linens & Things on the southside has been empty since it closed about 2 years ago and it sits not only in the same strip but right next door to Border's so if people were clammering for this space it seems someone would have taken over the Linens & Things spot. Just a thought
  • Matter of Time
    It's only a matter of time before Barnes and Nobles closes their stores. Yes, they have the nook, that has drawn people in and kept the stores with a relatively stead stream of business. However, once the market is saturated with the electronic devices, they will end up going to online only. Much like Blockbuster has had to do. There will likely be one or two stores that stay open, but the vast majority of them will likely be gone in the next 5-10 years.
  • Why did they fail...
    They failed because they failed to keep up with technology. They chose to rely on printed books and magazines, while keeping large, expensive stores. This is in contrast to their nearest rival, Barnes and Noble, which saw the advance of tech, developed the Nook, and are reaping royally from it. Additionally, many more buyers are simply purchasing their books online through the likes of Amazon.com or downloading straight to a Kindle/Nook/etc.
    • If such good locations----
      Why did they fail?

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      1. I had read earlier this spring that Noodles & Co was going to open in the Fishers Marketplace (which is SR 37 and 131st St, not 141st St, just FYI). Any word on that? Also, do you happen to know what is being built in Carmel at Pennsylvania and Old Meridian? May just be an office building but I'm not sure.

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