Bed Bath & Beyond isn’t gone yet, but news of its potential bankruptcy has landlords already looking beyond the retailer.
The real estate rebound of big-box retailers like Burlington and Barnes & Noble are fueling the hopeful fire among landlords of spaces with the potential to be vacated by the home goods store in the near future, the Wall Street Journal reported.
There was a net expansion of 2,400 stores by retailers last year, according to Cushman & Wakefield. It was the largest net expansion in a decade, illustrating a bump in desire to open more stores, particularly in suburban communities, than close them.
One of the biggest landlords for Bed Bath & Beyond has already landed commitments from tenants to fill all 12 locations it has been leasing to the retailer upon store closures. Pending tenants for the undisclosed landlord run the gamut, including Sephora, Trader Joe’s, T.J. Maxx and HomeGoods.
Landlords have already spent six months planning for the end of Bed Bath & Beyond’s leases. The stores are largely located in dominant shopping centers in suburban areas, one of the retail sector’s high-performance areas in regards to consumers.
Store size for the company ranges from 18,000 square feet to 70,000 square feet, forcing landlords to look to a variety of tenants to fill the spaces to meet their needs. It’s worth it for landlords to be ready, though, as a bankruptcy process could lead to missed rent payments from Bed Bath & Beyond.
The leasing plans come as Bed Bath & Beyond slides towards bankruptcy. Last week, the company defaulted on its credit lines. After announcing the closure of 150 stores in August — roughly 16 percent of its portfolio — the company recently said it would eliminate another 90 stores, including every location under the Harmon banner.
The bones of Bed Bath & Beyond aren’t the only ones on the verge of being plundered by incoming retailers. The parent company of Party City recently declared bankruptcy; the party supplies retailer operates more than 800 stores in North America.
— Holden Walter-Warner