Breaking News: Toys R Us Closures Could Cause Market Rents to Drop

Breaking News: Toys R Us Closures Could Cause Market Rents to Drop

The recent Toys R Us closures may have a large effect on the real estate market.

Toys R UsAs many of you may know, children’s toy store Toys R Us is going out of business. Due to these recent and looming closures, there will be an excess of vacant spaces that will be up for sale and rent. However, there are very few discernible replacements who may wish to claim these spaces.

We are currently in a time when few (if any) businesses are looking to claim additional physical spaces. Online shopping is more popular than ever and, at least for most companies, choosing to expand a physical footprint is not a wise business strategy. Because of this, market rents may drop to accommodate for the surplus of vacant spaces.

We have seen this closing trend in retail stores in the past – the bookstore Borders, for one, went out of business last year, leaving the same amount of empty chambers for rent. Rents were unstable at the time, and many retailers declared that they would not be willing to expand until rents stabilized. It has been predicted that the time may be now.

What does this mean for realtors? Well, there is good news and bad – it is true that not many companies are looking to expand at the time being, especially small businesses. However, if rents decrease, retailers and/or big companies may be intrigued now more than they were a few years ago. Therefore, these are the businesses that would be the target market for replacing the vacant Toys R Us lots.

Closures are always a struggle, especially because they tend to scare other businesses away from further expansion. We are in a digital age, an age of immediacy, and age of preferred online business transactions, as opposed to physical business transactions. This can make finding physical renters a battle, especially in a time when there are so many empty spaces up for grabs. A drop in rent prices could help tremendously with that – it is something to be on the lookout for, and to mention to any large retailers you may have leads for.