Categorized | Commercial

Borders Closings Affecting Retail Real Estate?

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The closing of the Borders bookstore may affect the retail real estate market in the Ann Harbor Michigan area. The bookstore decided to ask a bankruptcy judge to let it stop operations and liquidate. The company was unable to find any offers since it put itself up for sale. Unfortunately the closing means many will lose their jobs as well as their favorite bookstore. However, the closing of the bookstore is also going to affect the real estate market. The company has 399 stores nationwide and all of them will be shut down eventually if Borders does not find a solution. The closing of other big businesses and car dealerships have left real estate campuses with large retail spaces. These retail spaces are hard to re-lease to other businesses. Many of the big businesses brought a lot of traffic to other businesses in the same retail campus. However, the closing of businesses such as Borders will cause surrounding business to suffer. Malls and community shopping centers nationwide are reporting rising vacancy space.

2011 was supposed to be a comeback year for the retail and restaurant business but it has not turned out that way. Since businesses are still struggling they have to move to other areas or close down all together. If these shops close, then someone still has to pay for the electricity, security, and regular upkeep. One could only imagine that the cost of the upkeep is quite expensive and should only be handled by a big business that brings in enough revenue. There are some areas that are still striving in these economic times. Some regional indoor malls and outlet centers still attract enough revenue to keep afloat.

When these big retail spaces are left vacant, they are turned into museums and go kart tracks. These spaces are big enough to contain these events but museums and tracks do not bring in the same type of revenue that a big business like Wal-Mart might bring.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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