Raymour & Flanigan, Liquidator Chain Compete on Paramus Toys R Us Lease
Only Two NJ Sites Get Qualified Bids
Two retailers, Raymour & Flanigan and National Wholesale Liquidators, have submitted competing bids to take over the lease for the Toys R Us site on Route 4 in Paramus, NJ, according to legal documents.
The once mighty toy-store giant is in the midst of bankruptcy proceedings that started out as a Chapter 11 filing and have evolved into a full-fledged liquidation. As an initial part of those proceedings, bids were solicited and were due this week for an early round of stores that were slated to be closed.
Of the Toys R Us and Babies R Us locations across the country whose leases are up for auction, qualified bids were filed for two sites in New Jersey – the Paramus store at 250 Route 4 and a former Babies R Us at 700 Nassau Park Blvd. in West Windsor, NJ.
Raymour & Flanigan submitted a bid for the West Windsor lease and one in New York in addition to the one in Paramus.
Officials at the Liverpool, NY-based furniture retailer and at National Wholesale Liquidators, a chain of warehouse-style discount stores headquartered in West Hempstead, NY, couldn’t be reached for comment Friday.
The owner of the roughly 41,000-square-foot Paramus store, N.T. Hegeman Co. of Paramus, and the 37,000-square-foot West Windsor store, DDR Corp. of Beachwood, OH, also couldn’t be reached for comment.
The site on Route 4 in Paramus would have a lot of appeal for retailers like Raymour & Flanigan and National Wholesale Liquidators, according to Matthew Harding, president and chief operating officer of Levin Management Corp. in North Plainfield, NJ. His company has five Toys R Us stores in its portfolio of 100 properties, including the second-ever of the toy retailer's hundreds of outlets, in Watchung, NJ.
"Raymour & Flanigan has been doing a lot in terms of looking for locations," Harding said. "This particular site is really a good freestanding site for one of these two users. Raymour & Flanagan tends to have a strong presence when they do their stores. A freestanding location like this would be a natural location for them; National Wholesale Liquidators to a certain degree, as well."
Levin Management is also the landlord for a Raymour & Flanigan outlet store on the other side of Route 4, westbound, in Paramus not far from the Toys R Us location, Harding said. A regular Raymour & Flanigan located near the outlet would "work well together," according to Harding.
There is also a National Wholesale Liquidators store near Paramus in Lodi, NJ.
Toys R Us occupies more than 1 million square feet of retail space in northern and central New Jersey, generally in the 20,000- to 50,000-square-foot range, according to Transwestern's NJ research department. Retailers active in that range recently include discount retailers, fitness centers, grocers and recreation centers.
"There really has been no action as of yet, as the Toys R Us stores have only recently closed or will be beginning to shut down soon after liquidation," said Matt Dolly, director of research for Transwestern in New Jersey.
As for the many stores that were not part of the auction, Dolly offered some possible scenarios on them.
"Standalone sites could possibly make for a redevelopment play, while landlords who own power centers with strong anchors where Toys R Us stores are closing would seem to have a better opportunity to relet the space. It may be viable to divide and upgrade the space for smaller tenants at other former Toys R Us locations," he said.
Much of those centers in the state are older and in some cases the infrastructure is dated, largely because Toys R Us has not signed any new retail leases of significance in more than 10 years and in most cases the toy giant has been at their NJ locations for well over 25 years, the firm noted.
The auction of these leases was held Thursday in Manhattan. In some cases there were multiple qualified bids for a single store, as was the case with the Paramus site and stores in Emeryville, CA, and Highland Park, IL.
Some of firms that submitted the total of 60 bids for leases for Toys R Us and Babies R Us locations nationally include AVG Partners LLC, Festival Development Corp., Big Lots, Aldi, Target, PGA Tour Superstore, Fit Factory and Scandinavian Design.
As part of the process, Toys R Us is reviewing the bids and has the right to ask for additional information from the bidders. The court will have final approval on the lease sales.
"We are following it pretty closely through our bankruptcy counsel," Harding said.
The dismantling of the toy retailer includes putting the company’s headquarters (pictured, above) and its 193-acre corporate campus in Wayne, NJ, on the block. The retailer purchased the property at 1 Geoffrey Way, a street named after the company’s giraffe mascot, for $35.5 million in September 2001, according to CoStar data. The parcel includes two office buildings, one 415,000 square feet and the other 160,000 square, according to CoStar.
Wayne Mayor Christopher Vergano couldn’t be reached for comment.