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Borders Pulling Out of Goleta as Company Announces More Bookstore Closures

Commercial real estate leaders don't expect the Camino Real Marketplace location to stay vacant for long

Borders Group plans to close 28 additional bookstores, including the Borders at Camino Real Marketplace in Goleta, according to a Reorganization Closure List posted on its Web site.

The 28 stores are on top of the 200 locations the company previously announced it plans to close as part of its reorganization under bankruptcy protection. The State Street and Oxnard stores closed earlier this year.

Borders, the second-largest U.S. bookstore chain after Barnes & Noble, once had 500 superstores. It filed for bankruptcy protection last month, several weeks after it delayed payments to some publishers who in return stopped shipping books. But Borders has resumed with all payments, Borders spokeswoman Rosalind Thompson said.

The stores’ “ongoing economic viability” was in question, Borders said in a statement.

Amazon.com sells more electronic books on its Kindle and iPad than hardcover or paperback books, and other types of e-readers are gaining popularity.

Mark Ingalls, property manager for Camino Real Marketplace, told Noozhawk last month that he expected to see additional closings but not the Goleta store because “it did well for Borders,” adding that the State Street closure might help business. Ingalls could not be reached Friday.

But the news didn’t come as a surprise to Radius Group Commercial Real Estate general manager Brian Johnson.

“I wasn’t surprised to see it, but it just came earlier than I expected it,” assuming all Borders stores close within this year, Johnson said.

He said the closure isn’t likely to have a major effect on Camino Real Marketplace, because the location will draw tenants similar to the new Ross in the marketplace and REI’s opening on Lower State Street this fall.

“Lease rates have dropped from 2008 to 2010, but we are starting to see it stabilize,” Johnson said. “I don’t think we’re going to see a rush up anytime soon, and I don’t see a huge reduction either.”

High-end designer fashion retailer Blue Bee recently closed several stores last week, but Johnson doesn’t expect those locations to stay vacant for long either.

“It’s more telling in regards to the change of consumption habits of folks here locally; in particular, people are not looking to pay $200 for their jeans,” he said. “Those consumption days may be over for a while. It’s a shame they couldn’t hang on and ride through that.”

Johnson said there have been higher sale and lodging tax revenues so far this year, and that consumers’ and investors’ confidence is back.

“There is room for soft-good and other retailers to come to Santa Barbara and make it,” he said. “I think people are more optimistic even though we’ve seen things happen to Borders and Barnes & Noble.”

It’s a good time for investors to get into the Santa Barbara market, said Jim Haslem, principal at consulting group Huntley, Mullaney, Spargo & Sullivan Inc.

“National retailers have been expanding sales across the country and are opening more stores, so they say it’s time to get into the Santa Barbara market,” he said.

Johnson said he expects a big-box national retailer to move into the Borders spot in Goleta, possibly something like T.J. Maxx or a house-wear retailer similar to Linens & Things.

Barnes & Noble Bookstore and Café, formerly at 829 State St., also closed in December.

Noozhawk staff writer Alex Kacik can be reached at .(JavaScript must be enabled to view this email address). Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Become a fan of Noozhawk on Facebook.

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