How many ‘zombie’ stores will be left in the Philly area after Rite Aid’s bankruptcy?

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Anyone hoping to catch a glimpse of Philadelphia’s architectural history by lingering in the aisles of a Center City Rite Aid, lost their chance — for now.

Instead, window shoppers banking to mull medications or grocery staples on their lunch break will only see plain corrugated steel behind locked glass doors.

Hidden from view are the ornate moldings on high ceilings and a chandelier dating back to the early 1900s near Rittenhouse Square.

That’s because the Philadelphia-based retailer Rite Aid filed for Chapter 11 bankruptcy protection in October 2023. It’s now on track to shutter hundreds of stores nationwide.

The former Rite Aid at 17th and Chestnut Street closed this month. The lease for that space is on the auction block slated for Feb. 8, as are dozens of other stores across the Delaware Valley.

But court records show the Rite Aid retail auction has already been pushed back several times.

The 17th and Chestnut Rite Aid Pharmacy is the ground floor retail for Club Quarters Hotel Rittenhouse Square, which sits above it.(Kristen Mosbrucker-Garza /WHYY)

Rite Aid did not respond to WHYY News’ requests for an interview for this story.

For now, it’s unclear how much of an economic development logjam the slew of recent Rite Aid store closures may be – some sites could take months. Others may linger for years like zombies — shuttered but with no movement, affecting customers and other businesses and developers hoping for a vibrant commercial corridor.

“They paid the most rent. And they also brought very good credit to a landlord,” said Steve Gartner, executive vice president for CBRE, a global commercial real estate advisory company. “What landlord would not want a pharmacy as their tenant?”

For perspective, the average 13,000-square-foot retail pharmacy store might have paid $40 per square foot and was locked into a 10-year lease. But now, all those leases are broken under the bankruptcy court process, which means more unexpected vacancies. In Center City, there’s already plenty of vacant retail competition for businesses to take a risk on.

“Many of those landlords bought those [Rite Aid] properties as a passive investment. And that landlord might be the owner of just that one piece of real estate,” Gartner said. “They don’t care about the street. Let alone the neighborhood.”

The delta between a commercial building staying open or closed is much more complicated than whether the ground floor retail operator has locked the doors.

It also matters to more than just casual shoppers or architectural shutterbugs, tax bills for commercial building owners are easily tens of thousands of dollars each year, which all help fund all city services.

  • January 30, 2024
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