The collapse of Toys "R" Us Inc. is another blow to the owners, who will now have huge holes in the suburban space. And few tenants would want them.
The toy chain loaded with debts, with more than 700 stores in the US UU., It became one of the biggest victims of retail decline when it announced on Thursday that it would go  out of business after a failed rescue effort. The liquidation could throw millions of square feet of real estate into a market that is already crammed with retail bankruptcy vacancies and store closings, a trend that has been escalating as shoppers increasingly turn to the Internet.
"It's really hard now, to find a solution for something so big and with so many places," Jan Kniffen, a retail consultant and founder of J. Rogers Kniffen Worldwide Enterprises, said in an interview. "How many people need more stores right now? How many people need more square feet? Not many."
Toys "R" Us has stores in all kinds of shopping properties, from independent locations to community strip clubs and large regional shopping centers. Many centers are in the hands of real estate investment trusts that quote on the stock market that rent space to the chain and may have problems with the decrease in the values of the properties. Some stores are the property of Toys "R" Us.
The success of landlords in filling empty stores will depend on the quality of the properties and their locations, according to research by CoStar Group Inc. Toys "R" Us owns many of the stores in weaker areas, while that GGP Inc., the second largest US commercial center REIT, tends to have some of the best locations and it would be easier to find new tenants, according to CoStar. Somewhere in the middle are companies like Simon Property Group Inc., GGP's biggest rival, and Kimco Realty Corp., the research firm said.
Representatives of GGP and Simon declined to comment. A representative of Kimco did not answer a call.
Even with vacancies, some properties remain "viable commercial real estate," wrote Ed Reardon, an badyst at Deutsche Bank AG, in a note to clients. Locations at power centers – properties anchored by discount department stores or warehouse clubs – would be easier to fill than stand-alone locations, with retailers expanding as Michaels Cos., Dick & # 39 ; s Sporting Goods Inc., TJX Cos. And Ross Stores Inc. is one of the most likely contenders for space, he said.
Other chains with locations approximately the same size as Toys "R" Us stores, including Buy Co. and Bed Bath & Beyond Inc., are focusing on expanding their online businesses and remodeling stores existing instead of adding new locations. Target Corp. has said that plans to open dozens of smaller stores in the next two years, but will be in nearby cities and university campuses.
"We have excellent locations throughout the country, and the stores are running," said Best Buy CEO Hubert Joly in an interview on March 9. "It's sad when a company retires, but it is what it is."
Toys "R" Us, based in Wayne, New Jersey, has been in debt since 2005, when Bain Capital, KKR & Co. and  Vornado Realty Trust took the company as a private company in a leveraged buyout of $ 7.5 billion. Vornado's spin-off, Urban Edge Properties, has Toys "R" Us stores in some of its centers, according to CoStar data.
Divide and conquer can be the solution for a large part of real estate, with multiple smaller businesses such as restaurants or cinemas that distribute the large spaces of Toys "R" Us. But it is one that is potentially less lucrative for owners.
"They will have to improvise one individual location at a time," Kniffen said. "They will use uses that generate much less in sales per square foot than these types, which means that you can not charge as much in rent."
Splitting space would also add costs to owners, while filling stores with out-of-price retailers would require less reconfiguration, badysts at RBC Capital Markets LLC led by Wes Golladay said in a note Wednesday.
The exit of a tenant as big as Toys "R" It is possible that we give some owners the opportunity to reinvent their shopping centers and improve the combination of tenants to make it more internet proof. Owner DDR Corp. has indicated that two of the closures would lead to redevelopment, Golladay said in the note.
A DDR representative did not respond to an email seeking comment.
With other retailers of the big box, such as the office supply chain Staples Inc., which could close stores of a similar size, "potential replacement tenants have a lot of bargaining power" with the owners, said Reardon, of Deutsche Bank, in an interview. "The competition is not that intense."
– With the badistance of Lauren Coleman-Lochner