Nine spaces totaling 272,172 square feet have now been on the market for two years or more. However, close to half of those longer-term vacancies are clustered in a totally empty power center in Livingston. New big-box space becoming available in the past year included a pair of 22,500-square-foot pad sites at the Kmart-anchored center in Randolph and a new 20,000-square-foot building in Morris Plains.

Home Goods leased the 23,000-square-foot former Branch Brook Pools location in East Hanover Plaza. The relatively quick deal for the property which went on and off the market in the past year, points to demand for well-located sites along Route 10, said Richard J. Brunelli, whose company delivered its 23rd annual survey earlier this week.

Other highways with retail vacancy issues include:

Route 17

Vacancy rose for the third year in a row along the 15-mile section from Paramus to Mahwah, to 8.3% from 8.2% in 2012 and 7.4% in 2011. Over the last 10 years, vacancy has ranged from 3.2% in 2005 to 8.7% in 2010.

A total of 411,224 square feet of vacancies in the corridor's 4.94 million square feet was identified. Big-boxes accounted for 60.8% of the vacant space, the highest ratio for any of the ten corridors in northern and central New Jersey studied by the firm.

New vacancies this year include Electronics Expo, XSRE and Loehmann's stores totaling 65,000 square feet in Paramus and Ramsey. These added to the 205,000 square feet of older big-box inventory divided between the roadway's former Home Depot Expo, Syms, Sixth Ave., K&G Menswear, and Pearl Art stores in Paramus and Ramsey.

The impact of the newer closures was partly offset by new deals with Basset Furniture for half of the former 40,000-square-foot Circuit City store in Paramus Town Center (the since-closed XSRE occupied the other half) and DSW's lease f the former 25,000-square-foot Border's at Interstate Shopping Center in Ramsey. Also, the former 28,000-square-foot Lord & Taylor Home store in Paramus' Fashion Center was taken by Buy Buy Baby, which relocated from Paramus Towne Square.

Route 4

With the closing of Daffy's in Paramus Place, the vacancy rate along the three-mile area between River Edge and Paramus increased to 5.4% from 5.0% in 2012 and 4.2% in 2011. The current rate is well below the 10-year high of 10.6% reached in 2005, but well above the 1.8% low set in 2004.

R.J. Brunelli found 121,950 square feet of dark space in the 2.27 million square feet of retail along Route 4.

The impact of Daffy's closure was softened by the opening of Stickley Furniture in the long-vacant, 20,000-square-foot former Levitz building in Paramus.

Route 46/3

The vacancy rate for the 21-mile corridor of Route 46 between Dover and West Paterson and the adjoining section of Route 3 in Clifton increased to 5.7% from 4.9% in 2012, but stayed below the 10-year-high of 7.3% reached in 2011. Over the last 10 years, this corridor's vacancy had been as low as 2.1%, in 2008.

The survey found 402,079 square feet of vacancies with the corridor's 7 million square feet.

The Original Story Appears Below

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The “big box” retail spaces filling up along Route 22 have helped make the whole picture look slightly better for northern New Jersey retail, says R. J. Brunelli and Co. in its 23^rd annual report on the sector. But only slightly better.

With only one other shopping corridor – Route 23 - showing improvement compared to last year, the vacancy rate for the entire six-corridor survey area edged downard to 8.1% from a high of 8.2% a year ago.

The region's retail vacancy has been over the 8% mark for the last four years, according to the Brunelli survey.

There were 2.4 million square feet of vacancies in the 29.5-million-square-foot survey area. Of 909 properties reviewed, 176 had space available. Last year, Brunelli found 2.33 million square feet of vacancies in 28.34 million square feet of space.

The Old Bridge-based firm conducted the study during the second quarter of this year, looking at shopping centers and freestanding buildings with more than 2,000 square feet along State Highways 4, 10, 17, 22, 23 and 46/3, and some intersecting arteries in Bergen, Essex, Morris, Passaic, Somerset and Union counties. Freestanding restaurants, auto service facilities and auto dealerships are also included, while enclosed regional malls and centers under construction or redevelopment are excluded.

“Despite the progress shown on the hard-hit Route 22 corridor, northern New Jersey has yet to recover from the effects of the rash of big-box retail bankruptcies that began to elevate vacancies in 2009 when the rate jumped to 6.6% from 3.6% the prior year,” said Richard J. Brunelli, president of the firm.

Northern New Jersey had previously enjoyed a long reign as one of the top-performing retail real estate markets in the country, boasting a 3% vacancy rate in several years in the past decade. In 2003, there was just 2% vacancy.

In this survey, Brunelli said, the company found that health clubs and retailers looking to expand their regional footprint have been filling up big-box space.

“But we're also seeing rising vacancies in small store space,” he said. “Small chains and mom-and-pops continue to struggle to get financing for new locations or start-up ventures. Meanwhile, marginal operators unwilling to try to make a go of it in a tough economy are shutting their doors as leases expire.”

The 2013 survey again found the most vacancies for big-box stores larger than 20,000 square feet. They amounted to 1.06 million square feet, or 45.7% of total empty space. This was slightly improved from 2012, when there was 1.09 million square feet of vacancies, accounting for 46.7% of all vacant space.

The large preponderance – about 73% - of this year's empty big-box space was in stores that had been vacant since the last survey. In many cases, said the report, the space had been vacant since 2011 or before. In fact, space lingering on the market for at least three years totaled 612,700 square feet, or 58% of the region's big-box inventory. That includes locations formerly operated by Circuit City, Linens 'N Things, Office Depot, Home Depot Expo, Borders, and Pathmark.

“During this past year, we saw some positive developments in particular with big-boxes left over from the Border's bankruptcy and The Great Atlantic & Pacific Tea Co.'s selective closures of under-performing Pathmarks,” Brunelli said. He said

• Of four Pathmarks that were available last year, two have been taken by Costco and ShopRite on Route 22, leaving two along Route 10 in play.
• Of four Borders locations, two were taken, the space on Route 17 by DSW Shoes and the one on Route 23 by Jo-Ann Fabrics. Stores on Routes 10 and 22 are open.

Four vacant spaces totaling 120,000 square feet, situated along Routes 10, 17 and 22, were generated by the bankruptcies of Sixth Ave. Electronics, Syms and Einstein Moomjy. All but 20,000 square feet of that has remained vacant for more than a year.

In the past year, another big-box vacancy occurred with the closure of the 42,000-square-foot Daffy's on Route 4 in Paramus. The bankrupt chain's freestanding 30,000-square-foot location on Route 10 in East Hanover is being subdivided. R.J. Brunelli is exclusive broker for the space.