A new wave of vacant space is set to hit the local retail market as Borders begins shuttering all of its remaining bookstores in the Washington area: 11 big-box stores, four airport kiosks and four Borders Express locations.
With no buyout offers on the table, a bankruptcy judge gave Ann Arbor, Mich.-based Borders Group the go-ahead last week to liquidate its 399 stores. The process, led by Hilco Merchant Resources and Gordon Brothers Group, got underway Friday and is expected to wrap up by the end of September.
Borders, which employs some 10,700 people, is trying to strike a deal to sell 30 to 35 of its stores to Books-A-Million of Birmingham, Ala. It’s unclear whether any of those stores is local, as neither company returned calls for comment.
The 19 locations in the Washington area represent nearly 530,000 square feet of retail space that will enter a market already struggling to find replacements for Borders’ last batch of shuttered stores.
When the company filed for Chapter 11 bankruptcy reorganization in February, it closed 200 locations, eight of which were in the area. None of those sites, representing nearly 200,000 square feet of space, has reopened with a new tenant, though a few leases are in the works.
Chris Weilminster, senior vice president of leasing for Federal Realty Trust, said the company is “in final negotiations” with a tenant for the former Borders space at Friendship Center in Friendship Heights. Though he would not divulge the name, he said the store would open in the spring of 2012.
Owners of the former Borders site on Lee Highway in Tysons Corner have signed a deal for the first floor of the two-story building, but are also unwilling to release the retailer’s name, according to Dimitri Georgelakos of KLNB Retail, who engineered the agreement.
Georgelakos is also involved in leasing the shuttered sites at the Boulevard at the Capital Centre in Largo and Bowie Gateway Center, which he said are generating interest from retailers though nothing is in writing yet.
The same is true of the former Borders at Winchester Station, Stafford Marketplace, White Flint Mall and on K Street NW. Borders stores are generally between 20,000 and 40,000 square feet, save for the airport kiosks and Borders Express shops.
“The bigger the tenant, the longer it takes to get the lease done,” said Transwestern’s Bill Miller. “Half of those deals could be signed in the next week. Even if they’re not, larger-format tenants are looking for space.”
Echoing Miller’s sentiments, David Dochter of Cushman & Wakefield said he already has clients sizing up the new set of Borders locations.
“Most of the ones they are shutting in this round are their better-quality real estate,” he said. “In the D.C. region specifically, they’ll be able to get absorbed. There are a number of groups out there looking: DSW, TJX, Sports Authority, REI, not to mention many of the grocery stores that are active.”
List of the last 19 Borders stores to be closed:
Big-box Borders Stores:
1201 Hayes St.
5871 Crossroads Center Way
8518 Fenton St.
6701 Frontier Dr.
11054 Lee Hwy.
3304-A Crain Hwy.
2904 Prince William County Pkwy.
21031 Tripleseven Rd.
6151 Columbia Crossing Cir.
11270 Bulloch Dr.
20926 Frederick Rd.
•Fair Oaks Mall in Fairfax
11713 Lee Jackson Hwy.
7101 Democracy Blvd.
•Dulles Town Center
21100 Dulles Town Cir.
•The Mall at Columbia
10300 Little Patuxent Pkwy.
Reagan National Airport: one location
Dulles International Airport: three locations