A new batch of Big Lots store leases, about 500 nationally, has hit the market and is being sold by the chain's new owner, Gordon Brothers.
The new-to-market stores are primarily in shopping centers, across 47 states, according to Boston-based Gordon Brothers. Offers are due no later than Jan. 24. Bidders can seek to acquire individual or multiple leases for the 495 locations, Gordon Brothers said. There's already been interest from several dozen potential buyers, including one looking to acquire a group of 150 leases, Al Williams, co-head of North America real estate services at Gordon Brothers, told CoStar News on Wednesday.
"There's a tremendous amount of value in this portfolio," he said. "It's like no other. It's incredibly well-managed with long-term leaseholds. ... It presents really a once-in-a-generation opportunity for an occupier to expand its portfolio quickly."
Columbus, Ohio-based Big Lots has already closed or sold leases for hundreds of stores as part of its Chapter 11 process. Big Lots — selling overstock home goods and furniture at a discount — filed for bankruptcy protection in September. Earlier this month Gordon Brothers closed on its acquisition of the retailer's assets and saved it from liquidation.
Gordon Brothers is selling 200 to 400 Big Lots store leases to Henderson, North Carolina-based Variety Wholesalers — owner of more than 400 stores in the Southeast and mid-Atlantic — which will continue to operate them as Big Lots locations. Variety operates chains under the Roses, Roses Express, Maxway, Bill's Dollar Stores, Super 10, Super Dollar and Bargain Town brands.
The Big Lots leases up for sale don't include stores that Variety has expressed interest in buying.
The locations range in size from about 19,000 to 55,000 square feet, according to Gordon Brothers. 72 of the stores are in Texas. 49 of the leases are in New York, while 44 are in Florida.
As part of the Big Lots asset sale, Gordon Brothers got 903 store leases, according to Williams, and the 500 leases on the block now are from that group. Some of the leases on Gordon Brothers' list at this point have already been spoken for, according to Williams. In addition, the company is in active negotiations with 40 to 50 potential bidders, he said, with probably about 10 of them interested in "tranches" of store leases.
With the U.S. retail vacancy rate at a low of 4%, chains are hunting for spaces for new locations.
Variety is in the process of determining precisely how many Big Lots leases it will take and is talking to landlords, according to Williams. Variety's "goal is to get to the highest number as possible that makes sense for their business," he said.
The game plan for Gordon Brothers is "to enhance the Big Lots brand on Variety's behalf, grow that as far as possible with this transaction and ultimately... save jobs," Williams said.
Any store leases that Variety decides not to acquire will be marketed by Gordon Brothers and put up for bidding in a second auction, according to Williams.
Gordon Brothers is now also involved in the purchase of another troubled retailer — Hudson, Ohio-based Joann, the crafts-and-sewing retailer. The firm is the stalking-horse bidder for Joann, which on Wednesday filed for Chapter 11, its second bankruptcy filing in less than a year.