• Investing
  • Stock
Round Table Thoughts
  • Economy
  • Editor’s Pick
Home Editor's Pick These retailers will take over Bed Bath & Beyond’s ‘top-notch’ store leases
Editor's Pick

These retailers will take over Bed Bath & Beyond’s ‘top-notch’ store leases

by June 30, 2023
by June 30, 2023 0 comment
Share
0
FacebookTwitterPinterestWhatsapp

Bed Bath & Beyond locations across America will soon be replaced by Burlington Stores outposts and a range of other businesses, after the failed home goods retailer auctioned off its leases as part of its bankruptcy proceedings, court records show. 

The doomed big-box store selected bidders for 109 of its leases after a Monday auction. Off-price giant Burlington agreed to take over 44 of the locations for $12 million, the largest share of the leases, records filed late Tuesday show. 

Burlington secured six more leases for $1.53 million outside the auction process, bringing the total number of locations to 50 for $13.53 million, records show. 

Many of the locations are considered “top notch,” said Bill Read, executive vice president of commercial real estate firm Retail Specialists. The firm provides retailers in growth mode an opportunity to snag leases in prime locations amid a dearth of quality commercial real estate.

“In aggregate, the Bed Bath & Beyond locations were some of the best that I’ve seen become available. They’re usually in large community centers with Target as an anchor and multiple other desirable anchor tenants in the shopping center,” Read told CNBC. 

“These are generally in well-established, mature markets that have a proven track record of generating high sales,” he continued.

Several other retailers snatched up the leases. Here’s a list of the top winners: 

Burlington Coat Factory: 50 leases for a total price of $13.53 million.Michael’s: Nine leases for $2.55 million.Haverty: Four leases for $468,334.

The other winners include grocers, premium furniture stores and discounters. Macy’s paid $1.2 million for a lease in ritzy Winter Park, Florida, for a potential Bloomingdale’s location, and Barnes & Noble secured a lease in Concord, North Carolina, for $129,015. 

Landlords apart from those companies won 37 of the leases, the next-largest portion after Burlington. Those landlords can now find their own tenants and potentially get a higher rent price than they’d be able to within the auction process.

The leases are for both Bed Bath & Beyond and Buy Buy Baby locations. Leases for the Buy Buy Baby outposts could be clawed back depending on what happens at an auction for the chain’s assets, Bed Bath & Beyond said in a court filing. 

The leases sold are for stores that range in size from 14,000 square feet all the way to 92,000 square feet. 

Bed Bath & Beyond raked in $24.41 million from the lease auction. A portion of those proceeds will likely go to unpaid rents at the locations and the rest will go to Bed Bath & Beyond to pay the retailer’s many creditors. 

More from CNBC:

More than $200 billion in Covid loans potentially stolen by fraudsters, watchdog saysTake a look inside the factory fueling candy giant Mars’ $1 billion ice cream ambitionsPokemon Go maker Niantic lays off 230 employees, cancels games

When Bed Bath & Beyond filed for bankruptcy in late April, the retailer had 468 leases to its name, and 153 of them were brought to auction earlier this week, records show. Successful bids went through for only 109 of them.

The retailer had said in court filings that another wave of lease auctions could take place. It is unclear if that process is underway or what will happen to the additional leases that weren’t auctioned off this week. 

Retail bankruptcies and off-price expansion

The influx of available stores comes as vacancy rates for shopping centers fell to 5.6% in the first quarter of this year, the lowest level since commercial real estate firm Cushman & Wakefield began tracking in 2007.

The lack of available retail space can hinder companies looking to expand. But retail bankruptcies can provide a unique opportunity to snatch space they couldn’t otherwise access.

When Burlington reported earnings for the three months that ended April 29, the company noted it planned to open 70 to 80 net new stores in fiscal 2023. It aimed to open even more in the coming years. 

During a call with analysts, CEO Michael O’Sullivan said the company had its eye on “retail bankruptcies.”

“We think these bankruptcies are likely to have a significant impact on the availability of attractive new store locations … we’re confident that these bankruptcies will strengthen our new store pipeline,” said O’Sullivan. 

“We hope in 2024 and 2025, some of the availability that we’re seeing from retail bankruptcies will give us the opportunity to open more,” he added.

Burlington’s decision to buy Bed Bath & Beyond’s leases wasn’t its first foray into bankruptcy-run lease auctions, the chief executive said on the call. 

“We have a very strong real estate team that has a lot of experience dealing with retail bankruptcies. Many of our most successful and productive stores today were once upon a time Circuit City, Toys R Us, Sports Authority, Linens ’N Things,” said O’Sullivan, rattling off a series of other failed retailers that came before Bed Bath & Beyond. 

“Some of our best stores were created from carved-up Kmart or Sears locations,” he added.

Read, the executive vice president with Retail Specialists, said it’s “no surprise” Burlington was the top bidder for Bed Bath & Beyond’s leases. 

“Burlington is in aggressive growth mode, these are fantastic locations and they’re getting a lot of value for their dollar,” Read said. “Companies like Ross and TJX already have enough stores in their fleet that they didn’t have to be as aggressive in an auction to get new stores, but it’s perfectly reasonable for Burlington to be aggressive to reach their store count desires.”

Read added, “They’re getting reasonable rents, they’re getting great locations, they’re getting great co-tenancy and they’d probably be in a bidding war with other retailers at higher rents for these locations if it was outside of an auction.”

This post appeared first on NBC NEWS
You Might Also Like
  • Car insurance rates are nuts right now. Here’s how to lower your bill when cash is tight.
  • Federal Reserve fines Walmart-linked Green Dot Corp $44 million after customers lost access to funds
  • Federal judge overturns $4.7 billion jury verdict in ‘Sunday Ticket’ lawsuit, ruling for NFL
  • Target launches paid membership program as it chases new revenue streams
Share
0
FacebookTwitterPinterestWhatsapp

previous post
AOC ridiculed for viral take on legacy admissions following Supreme Court’s affirmative action ruling
next post
GNG TV: Rotation into Industrials, New “Go” Trend

You may also like

Bud Light sales plunged after boycott over campaign with transgender...

August 4, 2023

Buy Buy Baby draws sale interest in Bed Bath &...

June 6, 2023

Spirit AeroSystems to furlough 700 workers as Boeing machinist strike...

October 21, 2024

Feds launch investigation into Tesla seat belt parts

March 30, 2023

‘Would you like to upgrade?’ Travel brands want everyone to...

January 14, 2024

The installed base of fleet management systems in Europe will...

December 16, 2022

Honda recalls nearly 564,000 CR-Vs sold in 22 cold-weather states...

April 7, 2023

Smart Cities Cellular Connectivity to Generate Over 143 Petabytes of...

March 6, 2023

Online retailer Zulily is shutting down

December 29, 2023

Walmart and Target face similar problems — but only one...

August 19, 2023

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout, pulls outlook

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025
    • The Unpredictable Stock Market: How to Make Sense of It

      May 8, 2025
    • AMD CEO calls China a ‘large opportunity’ and warns against strict U.S. chip controls

      May 7, 2025

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be...

      June 27, 2024 2,630 views
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as...

      August 9, 2024 2,339 views
    • 3

      Biden appointee played key role in recruiting Chinese...

      June 25, 2024 2,320 views
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful...

      July 10, 2024 2,302 views
    • 5

      Harris VP pick spent years promoting research facility...

      August 29, 2024 2,186 views

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Popular Posts

    • 1

      Trump-era China sanctions ended by Biden may be revived under new House GOP bill

      June 27, 2024
    • 2

      Walz’s honeymoon with China gets fresh scrutiny as Harris camp blasts ‘lying’ critics

      August 9, 2024
    • 3

      Biden appointee played key role in recruiting Chinese businesses to Delaware: ‘Longtime friends’

      June 25, 2024
    • 4

      Shein’s global ambitions leaves some cybersecurity experts fearful of Chinese spy threats

      July 10, 2024
    • 5

      Harris VP pick spent years promoting research facility that collaborated with ‘Chinese military company’

      August 29, 2024

    Latest News

    • Krispy Kreme stock plunges after doughnut chain pauses McDonald’s rollout,...

      May 8, 2025
    • Don’t Buy Robinhood Stock… Until You See This Chart Setup

      May 8, 2025
    • UnitedHealthcare sued by shareholders over reaction to CEO’s killing

      May 8, 2025

    Categories

    • Economy (7,009)
    • Editor's Pick (2,066)
    • Investing (538)
    • Stock (2,530)

    Disclaimer: RoundTableThoughts.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024 RoundTableThoughts.com. All Rights Reserved.

    Round Table Thoughts
    • Investing
    • Stock
    Round Table Thoughts
    • Economy
    • Editor’s Pick

    Read alsox

    Google loses antitrust case over search

    August 7, 2024

    Drought and extreme heat burn through...

    July 18, 2023

    Judge tosses defamation suit against Fox...

    July 23, 2024
    Sign In

    Keep me signed in until I sign out

    Forgot your password?

    Password Recovery

    A new password will be emailed to you.

    Have received a new password? Login here