The 45,000-square-foot Toys R Us building on West Waco Drive has hit the market, part of a 284-store package a New York-based real estate management firm has secured from the bankrupt retailer for disposal.
The iconic chain, drowning in debt, closed every store in the United States earlier this year following liquidation sales. That left consumers to search for holiday shopping alternatives and other chain retailers to pick up with slack by stocking more toys, according to the National Retail Federation.
Raider Hill Advisors, which has posted notices at the Waco location, announced that it will pursue deals on the nearly 300 properties in 46 states, comprising 14.5 million square feet. Properties include 284 stores, warehouses, distribution centers and even the corporate headquarters in New Jersey.
Danny Copeland, an analyst with Raider Hill Advisors specializing in market research, confirmed Monday that the Waco property appears on the list. He said the firm has been authorized to pursue the best deals available, which may include sales or leases, “whichever creates maximum value.”
The Waco property, built in 1986, has a taxable value of $2.69 million, according to the McLennan County Appraisal District.
Local real estate agents said the building likely will not languish on the market, based on demand for local retail properties. Among recently filled vacancies are the 50,000-square-foot Orscheln Farm & Home store in the former Gander Mountain building at 2701 S. Jack Kultgen Expressway; and FFO Home, which is opening this week at the old Hastings store at 5526 Bosque Boulevard.
Copeland, with Raider Hill Advisors, said its inventory of Toys R Us properties already is attracting attention nationally, “some locations more than others.” He said he could not discuss sales prices or specific stores. He said he knows of no timeline for securing deals on the properties.
Brad Davis, a commercial agent with Coldwell Banker Apex Realtors in Waco, was upbeat about the Toys R Us location, which is not among his listings.
“I think it’s a great spot,” said
Agent Pat Farrar, with The Reid-Peevey Company, markets CenterPoint shopping center next to the Toys R Us site. He said he has received inquiries from two national-name retailers intrigued by the vacancy, but he is not directly involved in the Toys R Us property.
Randy Reid, also with Reid-Peevey, said he has heard that remnants of ownership are pursuing a team to pull the chain from bankruptcy.
Published reports, including those in Reuters, Business Insider and Forbes, have indicated that the hedge fund ownership of Toys R Us has secured company markings related to Toys R Us and Babies R Us, with an eye toward launching a chain called Geoffrey’s Toy Box, named for the chain’s mascot.
The Kroger grocery chain dipped its toe into Toys R Us popularity, creating small “pop-up” toy shops in 600 stores, including more than 20 in the Houston area, according to reports, including in the Houston Chronicle.
“Our retail climate is pretty healthy, and we’ve leased most of the bigger boxes, with the exception of Toys R Us,” said Reid.
He said lease rates continue to rise around Greater Waco, including in downtown, along Interstate 35, in and near Central Texas Marketplace and in spots along Valley Mills Drive. This would not be happening without increased demand, he said.
Prime retail space, such as that occupied by Starbucks, can range from $35 to $50 a square foot, not including taxes, maintenance and insurance, while along stretches of Franklin Avenue and Waco Drive may range from $12 to $13 a square foot, triple net.
“Finding a tenant for 45,000 square feet will be a challenge,” said Reid. “But it’s in the middle of a lot of traffic, on Franklin Avenue and Waco Drive, and lies within the corridor moving people from the Hewitt/Woodway/West Waco area. It could be divided into a pretty effective retail center. There is always somebody out there you’ve never heard of interested in the market.”