Even big companies are getting screwed by NYC's skyrocketing
rents: Toys R Us will be leaving its enormous Times Square home next year.
Commercial
Observer broke the news, speaking with Cushman & Wakefield's Brad
Mendelson, who is marketing the 110,000 square foot space at Broadway between
West 44th and 45th Streets. He explained, "They did not exercise the
option to renew. Here’s the long and the short of it. They have 21,000 square
feet [on the ground floor]. There really is not a tenant that can rent that.
The market has just escalated so."
According to the CO, "The asking rent on the ground
floor in the 150,000-square-foot building is $2,500 per square foot, $150 per
foot on the lower level and $350 a foot on the second floor, the broker said.
Toys R Us is paying about half that since commencing to rent at the location in
2000, Mr. Mendelson said."
Since those rents are so insane, Cushman & Wakefield is
looking for multiple tenants to carve out the space.
Toys R Us has been struggling, seeing
a 2.7% drop in same store sales for the last nine weeks of 2014. Why? Well,
kids are getting
electronic gadgets at earlier ages and Amazon.com.
The Times Square Toys R Us features a ferris wheel (with
various toy and candy characters), a "Barbie Dream House" for Barbie
products, huge Lego displays of NYC landmarks, Jurassic Park dinosaur and many
superheroes. It's basically like crack for kids with actual crack for kids, thanks
to the Willy Wonka candy shop. It's dizzying and disorienting, but if you
have the nerve to venture there, there are actually some really good deals for
toys that even, yes, beat Amazon.
The toy retailer may be moving slightly north, to a spot at
1535 Broadway between West 45th and 46th Streets, but Toys R Us issued a
statement, "We have not signed a lease agreement for a new location and
any rumors regarding this ongoing process are just that."
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