Borders extends lease on Michigan Avenue

(Crain's) — Borders Group Inc. has struck a deal to keep its North Michigan Avenue store open another year, until January 2011.

The beleaguered book retail chain in

announced in February that it would close its longtime store at 830 N. Michigan Ave., saying the store had been falling short of the company's profit goals.

A company spokeswoman said Wednesday that the retailer and its landlord, the British Broadcasting Corp.'s retirement fund, recently came to terms on a one-year lease extension.

"We've extended the closing date for a year," the spokeswoman says. "We were able to negotiate a lease extension with terms that management expects will allow us to meet our profit objectives while remaining open for another year."

She wouldn't comment on whether the two sides sought to make a longer-term deal, and on the chance that Borders will seek another extension.

"What we're saying today is that the store will close in January 2011."

The one-year extension may be a sign of how difficult a time landlords are having leasing retail space these days, even for marquee locations like 830 N. Michigan, which is across the street from Water Tower Place. The BBC fund may be figuring that rents it can get in 2011 will be better than what it could get today.

Ann Arbor, Mich.-based Borders has been located in the three-level, 49,881-square-foot store since 1995.