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Brick-And-Mortar Retail Isn't Dead: Just Look At Who's Moving Into Empty Toys 'R' Us Stores

Andria Cheng retail real estate, saw more space vacated than occupied, REIS said, adding that Toys "R" Us's closings impacted Q2 statistics more than any other retailer had in any quarter over the last nine years. It also pushed the Q2 open-air retail space vacancy rate to 10.2%, the highest in more than three years, from 10% in Q1, said REIS, which studied 77 primary metro markets, from San Francisco and Seattle to Raleigh-Durham and Boston. Toys “R” Us said in March that it would shut its remaining 735 U.S. stores, mostly located in open-air shopping centers, after abandoning a plan to turn itself around. In the enclosed regional mall space, REIS data showed the Q2 mall vacancy rate also inched up 0.2 of a percentage point from Q1, to 8.6%, the highest rate since Q4 2012. That's not surprising either, considering the several store-closing announcements from specialty clothing retailers like J.Crew and Abercrombie & Fitch and department store anchor tenants including Lord & Taylor. Year-to-date, U.S. stores closings have totaled more than 4,100, more than double the 2,000 openings, according to a Coresight Research study released on Friday. "The retail real estate space is at a crossroads right now," REIS's economic analyst Cody Bond told me.

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