Bed Bath & Beyond is selling its real estate to private equity

Retailer will lease back space in deal that should earn the company more than $250M

Jan.January 06, 2020 10:05 AM
Bed Bath & Beyond (Credit: Getty Images)

Bed Bath & Beyond (Credit: Getty Images)

Bed Bath & Beyond will sell about half of its real estate to a private equity firm and then lease back the space, a deal expected to earn the company more than $250 million.

The retailer sold 2.1 million square feet of space to Oak Street Real Estate Capital, including its headquarters in Union Township, New Jersey, a distribution facility and some of its 1,500 stores, according to the Wall Street Journal. Bed Bath & Beyond will keep using the space under long-term leases and use the money from the sale to buy back shares, pay off debt and fund a turnaround effort.

The company has a new CEO in Mark Tritton, who joined in November after activist investors pushed out Bed Bath & Beyond’s top officials. The retailer’s strategy of attracting shoppers with coupons and stocking up stores with goods was becoming outdated under the dominance of online shopping.

Tritton restructured the leadership team in December and let six senior members go, including the chief marketing officer and the chief digital officer.

Retailers have faced more pressure recently to sell and lease back their properties, although several have resisted this strategy. Target fought off an attempt to do this in 2008, and Macy’s has done it occasionally but more often just outright sells its real estate. [WSJ] — Eddie Small

Related Articles

State Senator Julia Salazar and Assemblymember Harvey Epstein (Credit: Getty Images)

Pols take aim at private equity with plan to tax mezz debt

Ex-Barneys CEO Daniella Vitale (Credit: Getty Images, Google Maps)

Barneys’ lights still on, but workers left in dark

Faith Hope Consolo (Credit: Getty Images, iStock)

The real story behind Faith Hope Consolo’s glamorous life

Holiday spending was up this year — especially online (Credit: iStock)

Unsettling news for landlords: Online retailers killed it this holiday season

Moinian Group CEO Joseph Moinian, and a street view of the new Best Buy location (535 Fifth Avenue, at left) and the old one (529 Fifth Avenue, at right) 

Best Buy signs lease for new store at 535 Fifth

From top: 29 Nassau Avenue, 8973 Bay Parkway and 94 9th Street (Credit: Google Maps)

The 10 biggest Brooklyn retail leases of 2019

ICSC’s annual New York show will feature twice as much programming as in years past.

Here’s what to expect at ICSC’s 2019 NYC event

Federal Realty Investment Trust CEO Donald C. Wood and Georgetowne Shopping Center (Credit: Google Maps)

Fairway-anchored Bergen Beach shopping center sells for $85M