Burlington and a Bed Bath and Beyond Store
Getty Images
Bed bath and others Locations across the US will be replaced soon burlington store After the failed home furnishings retailer auctioned off its leases in bankruptcy proceedings, court records show, the company has dabbled in Outposts and a string of other ventures.
The doomed megastore has selected bidders for its 109 leases following Monday’s auction. Off-price giant Burlington agreed to take over 44 of those locations for $12 million, the lion’s share of the leases, according to records filed late Tuesday.
Burlington acquired six more leases for $1.53 million outside the auction process, bringing the total to 50 stores for $13.53 million, records show.
Bill Read, executive vice president of commercial real estate firm Retail Specialists, said many locations are considered “top-notch.” They offer retailers in growth mode the opportunity to secure leases in prime locations at a time when prime commercial real estate is scarce.
Read told CNBC: “Overall, the Bed Bath & Beyond locations are one of the best I’ve seen. They’re usually in the center of a large community with Target at their core and multiple other desirable locations within the mall. Anchor tenant.” .
“These products are typically located in established, established markets that have a proven track record of high sales,” he continued.
Many other retailers have also snatched up leases. Here is a list of the top winners:
- Burlington Coat Factory: 50 leases totaling $13.53 million
- Michael’s: 9 leases worth $2.55 million
- Haverty: 4 leases for $468,334
Other winners included grocery stores, upscale furniture stores and discount stores. Macy’s Barnes & Noble paid $1.2 million for a lease on a potential Bloomingdales location in Florida’s posh Winter Park, while Barnes & Noble’s Concord, N.C. (Concord) was awarded the lease for $129,015.
Along with these companies, landlords won 37 leases, the second-largest share behind Burlington. These landlords can now find their own tenants and potentially obtain higher rental prices than they would have achieved during the auction process.
This lease applies to Bed Bath & Beyond and Buy Buy Baby locations. Bed Bath said in a court filing that the lease on the Buy Buy Baby outpost could be repossessed depending on the chain’s asset auction.
Leases for sale are for stores ranging in size from 14,000 square feet to 92,000 square feet.
Bed Bath made a total of $24.41 million from lease auctions. Some of those proceeds will likely go toward paying unpaid rent on those locations, with the rest going to pay the retailer’s many creditors.
When Bed Bath & Beyond filed for bankruptcy in late April, the retailer had 468 leases to its name, 153 of which were auctioned off earlier this week, records show. Only 109 of these projects were successfully bid for.
Another wave of lease auctions is likely, the retailer said in court filings. It’s not clear if that process is underway, or what will happen to the additional leases that were not auctioned this week.
Retail Bankruptcy and Expansion at Low Prices
The influx of available stores The mall vacancy rate fell to 5.6% in the first quarter, the lowest level since commercial real estate firm Cushman & Wakefield began tracking it in 2007.
A lack of available retail space can hold back companies looking to expand. But retail bankruptcies can present a unique opportunity to grab space they otherwise wouldn’t have.
When Burlington reported earnings for the three months ended April 29, the company pointed to plans to open a net of 70 to 80 new stores in fiscal 2023. It aims to open more stores in the coming years.
In a conference call with analysts, Chief Executive Michael O’Sullivan said the company was watching “retail bankruptcy.”
“We believe these bankruptcies could have a material impact on attractive new store locations … We believe these bankruptcies will strengthen our new store pipeline,” O’Sullivan said.
“We’re hoping that in 2024 and 2025, some of the free space we’re seeing from retail bankruptcies will give us the opportunity to open more stores,” he added.
The CEO said on the conference call that Burlington’s decision to buy the Bed Bath lease isn’t the company’s first foray into receivership auctions.
“We have a very strong real estate team with extensive experience handling retail bankruptcies. Today, many of our most successful and efficient stores are formerly Circuit City, Toys “R” Us, Sports Authority, Linen’s N’ Things et cetera,” O’Sullivan said, citing a string of other failed retailers before Bed Bath.
“Some of our best stores were created out of Kmart or Sears,” he added.
Read, executive vice president of Retail Specialists, said it was “no surprise” that Burlington was the top bidder for the Bed Bath lease.
“Burlington is in aggressive growth mode and these are fantastic locations and great value,” Reed said. “Companies like Ross and TJX already have enough stores so they don’t have to put them up at auction Being so aggressive about acquiring new stores, it makes perfect sense for Burlington to be aggressive about their store count aspirations.”
He added: “They’re getting reasonable rents, they’re getting great locations, they’re getting great co-tenancy, and if those locations were in other areas, they might be competing with other retailers at higher rents. Buying War.” Auction. “
Svlook
