What Can Fill NJ’s Growing List of Empty Retail Space?
The eventual shutdown of Toys R Us and Babies R Us stores will leave behind an even greater amount of vacant retail space across New Jersey — more black eyes caused by the rising popularity of online shopping.
So what kind of establishments can fill these gaps, and won't just be the next casualty a couple years from now? What do New Jerseyans still need that they can't, or won't, purchase through their phone or computer?
"Landlords that are savvy will demise the space down as necessary for the classes of retail or the classes of services that are in demand," said Ron DeLuca, CEO of retail leasing specialist RJ Brunelli & Co. in Old Bridge. "We've seen Borders Books get divided into a health club on one side and a dialysis center, for instance, next door."
DeLuca noted there are only so many retailers looking for square footage in the 30,000 to 55,000 range, such as the footprint of soon-to-be-vacant Toys R Us locations.
While chains disappear, lesser-known "big-box" retailers making their foray into the Garden State include Texas-based At Home and Atlanta-based Floor & Decor. If they choose to expand, the new locations will need a lot of room.
According to DeLuca, today's hot retail concepts — which may be able to fill some empty space — include dollar stores and wholesale closeout shops such as the TJX family (T.J.Maxx, Marshalls and HomeGoods, etc.).
"These are stores selling top-quality goods, name-brand, at a slight discount," he said.
German grocery chain Aldi — another spot featuring discounted prices on multiple types of merchandise — may also be willing to fill some of New Jersey's retail gaps, according to Carol Kaufman-Scarborough, a marketing professor with Rutgers School of Business—Camden. The chain announced plans last year to expand significantly by 2022.
As for the larger vacancies, there are still a handful of retail categories that many shoppers prefer to experience in person, rather than digitally, Kaufman-Scarborough said.
"I think one thing people will always look at is furniture. Buying that online is tricky," she said. "That type of purchase, even though it's not made as frequently, would tend to serve a large space fairly well."
The furniture chain Raymour & Flanigan has submitted a bid of $1.3 million to take over the Toys R Us location along Route 4 in Paramus, according to NorthJersey.com.