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Following on the heels of the Great Atlantic & Pacific Tea Co.’s bankruptcy and store closures, the combined vacancy rate along central and northern New Jersey’s 10 major retail corridors rose to 8.3 percent from the previous year’s 7.4 percent, according to a survey by real estate brokerage R.J. Brunelli & Co. LLC.
The 26th annual survey of the two regions’ retail real estate market found a total of 5.18 million square feet of vacancies in the 62.36 million square feet evaluated during 2015’s third quarter, compared with last year’s 4.38 million square feet of empty space in 61.23 million square feet evaluated. During the past eight years, the combined vacancy rate varied from a low of 4.2 percent in 2008 to the high of 9.5 percent in 2013. A&P was a major contributor to the big-box vacancy surge along the central region’s corridors in particular.
“Clearly, the A&P bankruptcy was the big story for New Jersey retail real estate in 2015,” asserted R.J. Brunelli CEO/Principal Ron DeLuca, director of the firm’s survey. “While the bankruptcy process is still being played out, along the 10 central and northern retail corridors alone, recent closures of five A&P and three Pathmark locations that remain unclaimed placed more than 438,000 square feet of space on the market. Indicative of the impact of the closings, had those stores remained occupied, the aggregate vacancy factor for the two regions would have edged up 20 basis points to 7.6 percent.”
DeLuca added that the survey’s totals don’t include various A&P, Pathmark and Food Basics locations off the corridors that haven’t yet garnered approved bids in bankruptcy court. “Still, a number of supermarket companies pounced on the opportunities presented through A&P’s demise to expand their New Jersey footprint, most notably Acme, which took 35 sites, including 25 in northern counties, five in the central region and another five in the southern Shore region,” he said. “These sites, most of which were located outside the 10 corridors, accounted for nearly half of the 72 locations the chain took in an area extending from Maryland to Connecticut.”