Brixmor Property Group, a major owner of open-air shopping centers, has already found tenants — because retail space is so scarce — for some of the stores being left vacant by troubled chains across the nation.
The New York-based real estate investment trust, which has a portfolio of 360 retail centers, on Tuesday discussed how it's leased a couple of stores that Big Lots and Conn's HomePlus are closing. Brixmor officials also said in some cases they are getting double or even triple the rent from those new occupants.
"Our team has already been very proactive," Brian Finnegan, just promoted to be Brixmor's permanent president, said during a second-quarter earnings call. "We'd be taking some of the space back in the tightest box-supply environment that we've ever seen. So, we feel really good about the demand we're seeing for that space."
There have been a series of store closings announced this year and a number of Chapter 11 bankruptcy filings. Columbus, Ohio-based Big Lots, which sells merchandise closeouts at bargain prices, is shuttering more than 140 locations, according to it website. And Conn's HomePlus, based in The Woodlands, Texas, recently filed for bankruptcy and is liquidating, pulling the plug on all its 550 stores.
There were at least a a handful of Big Lots stores at Brixmor shopping centers on the list of closing locations, according to Finnegan.
"We signed leases with the likes of Aldi and Sprouts and Ross [Dress for Less] here on recently recaptured Big Lots spaces," Finnegan said. "We did have four stores that were on the initial closure list. Two of those are already leased, one with a great fitness use and one with a great off-price operator."
Brixmor is also "well on its way" to finding "better tenants at higher rents" for closing Conn's stores in markets such as Raleigh, North Carolina, and Houston, he said.
For example, that happened when a Sprouts Farmers Market leased a former Conn's-owned store in Knoxville, Tennessee, at close to triple the in-place rent, according to Finnegan. Conn's owns Badcock Home Furniture & More.
"As it relates to the Big Lots' rents in particular, those rents are $7, just below $8, a foot," he said. "We've been signing anchor leases around $16 a foot over the past year. And you can expect a similar level of upside, maybe not double, but ... a significant amount as it relates to those Big Lot spaces."
Brixmor has also executed its first lease with online furniture and home goods seller Wayfair in Greensboro, North Carolina, according to Finnegan. It debuted its first large-format brick-and-mortar retail location in Wilmette, Illinois, earlier this year.
"Yet another online retailer that is recognizing the importance of having a physical store footprint," Finnegan said.
The REIT also said that Finnegan, chief operating officer, will take on the title of president permanently, as well. James Taylor Jr. will remain CEO. Finnegan filled in for Taylor when he took a temporary medical leave in April.