Struggling retailer Kohl’s is targeting another chance to cash in on its real estate portfolio.
Private equity firm Oak Street Real Estate Capital is offering between $1.5 billion and $2 billion for Kohl’s properties, Reuters reported. People familiar with the deal told the outlet Kohl’s would lease its stores back from Oak Street.
The two sides have met in recent days to discuss a possible deal, according to the outlet. Kohl’s has 1,100 stores in its portfolio, but it’s not clear how many would be involved in a deal with the private equity firm.
Sale talks between Kohl’s and Franchise Group fell apart in recent months. When the exclusive negotiating period ended, Kohl’s said it would be “reevaluating monetization opportunities for portions of the company’s real estate portfolio,” valued at $8 billion. That marked a shift in thinking for Kohl’s, CNBC reported at the time, which previously appeared opposed to leaseback deals.
Leaseback sales enable companies to quickly realize funds while maintaining use of its properties. A drawback is the burden of potentially onerous leases or being cut from future leasing opportunities by the landlord.
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Commercial
New York
Kohl's looking to cash in on $8B real estate portfolio
Commercial
New York
Chicago firm buying billions in real estate from retailers on the brink
Commercial
Chicago
Blue Owl Capital agrees to buy Oak Street Real Estate in $950M deal
Oak Street has made a habit of buying billions of real estate from retailers on the brink of disaster. The firm has pitched companies in distress to sell them their properties and lease them back.
The firm in 2020 struck a $725 million deal with Big Lots in Ohio to purchase and lease back four distribution centers, allowing the retailer to pay down debt. In January of that year, Oak Street purchased 2.1 million square feet from Bed Bath & Beyond before leasing it back to the retailer.
Last year, Blue Owl Capital agreed to purchase the Chicago-based private equity firm for $950 million. At the time of the sales agreement, the 12-year-old Oak Street was managing $10.8 billion in assets.
— Holden Walter-Warner