A new survey of 205 closed Borders stores shows that one-third are still vacant, according to brokerage Colliers International. Those stores that filled the former Borders space are leasing at rates roughly 30% lower on average than what Borders paid, Colliers said.
The lower rents you can chalk up to the weak economy, but the fact that the rents don’t seem to be especially sticky and still you see a tremendous vacancy rate illustrates the structural decline of suburban big-box retail. Over time as the people:malls ratio rises the problem will grow less acute, and clever people will keep finding ways to convert these spaces into health care services facilities (or perhaps really big restaurants) but there’s just not as much need for giant stores full of physical items as there used to be. Small spaces work well enough as branding showcases.