Report: Area retail real estate market showing improvement

By Chris Reidy, Globe Staff

The retail real estate market in Eastern Massachusetts has taken “a turn on the road to recovery” after bottoming out in early 2010, according to a new report from KeyPoint Partners, a Burlington-based firm that offers commercial real estate services.

At the end of April, the vacancy rate for real estate occupied by stores was 9 percent in the 189 Massachusetts communities that KeyPoint examined. The study looked at retail real estate activity for a 14-month period. At the start of that period --- March 2010 -- the vacancy rate was 9.7 percent.

The drop was the first decline in the region’s retail vacancy rate since 2005, said Bob Sheehan, KeyPoint’s vice president of research.

During the reporting period, a number of big-box retailers expanded. “BJ’s led the pack” when it came to adding square footage to the amount of retail space that the chain occupied in Eastern Massachusetts, said KeyPoint, which noted that BJ’s opened three new locations in Waltham, Hudson, and Quincy. (Westborough-based BJ’s Wholesale Club Inc. announced yesterday that a group led by two private equity firms has agreed to buy the chain for about $2.8 billion.)

The Target discount chain and Ocean State Job Lot also expanded their square footage in the area, KeyPoint’s report noted.

If some chains were expanding, others were closing stores.

In December, TJX Cos. of Framingham disclosed plans to shut down its A.J. Wright chain of 162 stores nationwide, though it said that 91 of those stores would be converted to some other store formats operated by the company. Those include T.J. Maxx and Marshalls.

Blockbuster Video and Borders Books & Music closed stores in Eastern Massachusetts during the study’s reporting period, KeyPoint said.