Toys R Us to Close-Down Times Square Flagship Store

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Toys R Us Times Square, New York store front decorated for Angry Birds Star Wars launch (8th October 2012).

Toys R Us will close-down its flagship store in Times Square, New York when its current lease ends in February 2016. According to a report by the Commercial Observer, the toy retailer has decided not to exercise its option to renew the lease and is thought to be planning re-locate nearby.

The current store, in 1514 Broadway, opened its doors to the public in November 2001 and has been rented since 2000. It occupies 110,000 square feet, of which 21,000 square feet are on the ground floor. Landlord, Charles Moss, now wants $2,500 per square foot for the ground floor, $350 per square foot for the floor above and $150 per square foot for the basement; Toys R Us is currently paying around half that and is unwilling pay twice as much just to keep “The Center [sic] of the Toy Universe” at the exact same point on planet Earth.

With the market rents so high it is unlikely that any one tenant will occupy this vast space and it is likely that the building will be rented-out as smaller but still substantial department store-sized retail units of around 30,000 and 50,000 square feet.

Other occupants of 150,000 square foot building include Starbucks, Swatch, Foot Locker, and Bond 45; these retailers do not have the option to renew their lease, eviction of these tenants will facilitate with any necessary re-development to resize the retail units.

The Times Square store is probably the most theatrical toy shop in the world, among its features are a 60-foot tall ferris wheel, two-story house for its Barbie department, a 20 foot tall Jurassic Park animatronic T-Rex dinosaur, and 25 foot tall Lego replicas of New York landmarks. There are also regular opportunities for children to get their photograph taken with the Toys R Us mascot Geoffrey the Giraffe and a gift shop dedicated to purveying merchandise to remind of your visit to the Times Square store.

The rumoured location of a new New York Toys R Us store is in 1535 Broadway, in the Marriott Marquis hotel building. The current owners of this building are Vorando Realty Trust, which has a 32.9% stake in Toys R Us. Other joint owners includes Kohlberg Kravis Roberts (KKR) and Bain Capital Partners LLC. The city’s other destination toy store, FAO Schwarz, is also owned by the same consortium.

The lease of this space is being handled by Mr. Brad Mendelson of Cushman & Wakefield, the property has yet to be detailed on any website.

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