Bankrupt Bed Bath & Beyond is auctioning off 482 stores leases to the highest bidder.
Leaseholds that still have significant time left under the lease terms are valuable assets in a bankruptcy. Most are acquired back by landlords, although bidders can include others looking to take over some of the sites.
The retailer has hired A&G Realty Partners to drum up interest in the leases for Bed Bath & Beyond and BuyBuy Baby locations. Bidders could acquire a batch or individual leases.
“There are many desirable, strategically located stores with both high visibility and traffic,” A&G co-founder Emilio Amendola said. “These leases represent an incredible opportunity for an array of operators nationwide, due in part to the tremendous diversity of size ranges in play.”
A&G senior managing director Mike Matlat said landlords looking to get back vacant space will either fill them with single large-format tenants or subdivide the space and release to multiple, smaller operators. Since there’s limited new construction, acquiring leases at auction can also be an “efficient way for junior anchor tenants” to grow, Matlat said.
The stores up for auction were closed before the retailer filed for Chapter 11 bankruptcy on April 23, and won’t affect any potential buyers. Bed Bath & Beyond is working on closing the last of its 475 stores.
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Separate from the wind-down, the retailer continues to focus on trying to sell the business. A source with knowledge of the bankruptcy said that a “going-concern buyer would most likely look at the 475 stores being marketed now” for a June auction. Bed Bath & Beyond has been vocal about pausing additional store closings if a buyer wants to keep locations open and operational.
A&G Realty and JLL Commercial Real Estate also plan to market a North Carolina data center, as well as leases for warehouses and distribution centers. Matlat said many facilities boast below-market, fixed-rent leases with one or more renewal options.
Meanwhile, a federal bankruptcy court in New Jersey on Friday has set 12 p.m. ET on May 28 as the deadline for when qualified bids must be “actually received” in preparation for the court-approved auction. Bed Bath & Beyond has until May 22 to select a so-called stalking horse bidder to set the baseline amount for bidding at auction. The auction date, if needed, has been set for June 2, with a court hearing on the sale of assets scheduled for June 7.