Bankrupt Neiman Marcus is looking to wiggle out of four store leases as it aims to restructure and offload billions in debt.
A&G Real Estate Partners is marketing the four of the luxury chain’s leases in California, Washington, Florida and Washington, D.C.
“Real estate is a long-term play,” said Emilio Amendola, co-president at A&G. “These leases represent an incredible opportunity for retailers and investors to gain a foothold in markets that, under normal conditions, are renowned for their traffic and sales—as well as for their high barriers to entry.” Many are attractive locations for residential living, hospitality and office space, he added.
Just halfway through 2020, fashion retailers have announced more than 5,400 store closures, a number that will only continue to rise as the coronavirus pandemic, once thought to be under control, upends many states’ reopening plans—furthering straining already taxed brick and mortars.
Amendola said the rental availabilities offer long-term, multiple-option leases, with building situated in prime, high-visibility retail districts or shopping centers.
The 87,608-square-foot California location in Walnut Creek holds a lease term that expires on March 31, 2032, although options to extend are available through March 31, 2112. The D.C. location in the posh Mazza Gallerie mall spans 126,296 square feet, with a lease term that expires on Nov. 30, 2026. Options to extend run through May 31, 2051.
A Florida store in the pricey Palm Beach enclave is the smallest of the four locations at 48,661 square feet. The site also has the shortest lease term, with the initial expiration set for May 31, 2026, although extensions could run through May 31, 2051 if all are picked up.
The Seattle suburb of Bellevue, Wash., hosts the largest location being shopped around, totaling 124,638 square feet. The initial lease term expires on Jan. 1, 2040, and has options available that run through 2090.
News that Neiman is looking to right-size its store count isn’t exactly unexpected in the wake of its May bankruptcy petition. Prior to filing, the upscale chain had already shed the bulk of its Last Call off-price stores to rejuvenate a focus on full-price. Neiman, which intends to exit bankruptcy in September, still operates its Horchow brand business.
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The luxury retailer is also said to be negotiating an exit with its Hudson Yards landlord, Related Cos. The retailer has declined to comment on talks, but the three-level, 188,000-square-foot Manhattan flagship that was opened in March of last year is believed to be in the process of being quietly shopped by Related. While there’s been rumblings that Hudson Yards has yet to be profitable, Neiman has repeatedly said that before it filed for bankruptcy, all 43 stores open for at least a year, including the one at Hudson Yards, were profitable on an EBITDA basis. Though Hudson Yards reopened last month for curbside pickup, Neiman is not among the participating retailers offering the omnichannel service. As of Tuesday, the Hudson Yards site shows no indication on when the flagship store might open or be available for curbside pickup. In the meantime, the store is said to be playing a role in fulfilling online orders, one source said Tuesday.