Another batch of Rite Aid store leases, nearly 100 across eight states, are now on the block as part of the pharmacy chain's bankruptcy proceeding.
A&G Real Estate Partners, real estate adviser to Philadelphia-based Rite Aid, on Monday said it plans to market a second tranche of neighborhood drugstore leases, pending approval by the U.S. Bankruptcy Court for the District of New Jersey. The group includes 92 retail leases and 21 properties — stores and land — owned by Rite Aid, which will be available in private sales, according to A&G.
Rite Aid filed for voluntary Chapter 11 bankruptcy protection last month and is looking to shutter hundreds of stores in its fleet for its financial restructuring and to reduce its debt.
"As part of this, Rite Aid is continuing to assess its property portfolio and will close additional stores to optimize its real estate footprint and improve its overall financial performance," A&G said in a statement.
The latest grouping of Rite Aid leases for sale follows A&G’s announcement on Oct. 17 that it was taking bids for an initial collection of 78 Rite Aid and Bartell Drugs neighborhood pharmacy leases, as well as the 21 stores and land parcels owned by the retailer. More leases have been added to that list, so as of now 92 are available, according to A&G.
Rite Aid, struggling with debt, is one of several U.S. retailers that have filed for bankruptcy this year. Several of them — including Bed Bath & Beyond and Christmas Tree Shops — were forced to liquidate and shutter all their stores. By contrast, Party City and David's Bridal survived and emerged from bankruptcy, albeit with fewer stores.
Rite Aid, the third-largest U.S. drugstore chain, had more than 2,100 retail pharmacy locations across 17 states when it filed its Chapter 11 petition.
The expected newly available leases are in:
- California, 17.
- Maryland, six.
- Michigan, 22.
- New Jersey, seven.
- New York, 11.
- Ohio, two.
- Pennsylvania, 17.
- Washington, six Bartell Drugs, four Rite Aids.
“The lack of new build of this type of product is driving demand for these leases,” Andy Graiser, A&G co-president, said in a statement. “We continue to be pleased by the strong interest we are receiving across the country from potential replacement users.”
The stores range from 5,000 to 33,548 square feet. The sites include 53 freestanding locations, all but nine of which have attached one- or two-lane drive-thrus, as well as 36 stores located in strip or power centers, according to A&G. Three of the locations are in central business districts.
As Rite Aid's restructuring process moves forward, A&G said it will market additional leases, with the total number depending on the outcome of ongoing negotiations with the chain's landlords.
“In consultation with A&G, Rite Aid is working to strengthen its overall financial position by reducing its rent expenses and optimizing its portfolio,” Graiser said. “As it does so, other retailers and investors are now able to acquire leases and properties that once were out of reach locations, in attractive markets across the United States.”
As part of its Chapter 11 proceeding Rite Aid is looking to reject 347 unexpired store leases, and the court has given it approval to close 154 stores.