A&G Real Estate Preps Auction of Bed Bath & Beyond Leases

Assets include store, warehouse and distribution center leases, as well as a data center.

Bed Bath and Beyond store. Image by JHVEPhoto/iStockphoto.com

Bed Bath and Beyond store. Image by JHVEPhoto/iStockphoto.com

A&G Real Estate Partners is preparing to auction off hundreds of leases for beleaguered retail company Bed Bath & Beyond Inc.’s Bed Bath & Beyond and buybuy BABY stores. Union, N.J.-based Bed Bath & Beyond filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court for the District of New Jersey on April 23.

The company intends to wind down its business operations and is conducting a limited sale process of its assets, in whole or in part. Bid procedures for leases are subject to bankruptcy court approval.

New York-based A&G will market leases at store locations nationwide. Bed Bath & Beyond has 360 locations in 48 states and Washington, D.C., ranging in size from 18,000 to 92,000 square feet, while buybuy BABY has 120 stores in 37 states that range from 14,000 to 63,000 square feet. The company has secured $240 million in debtor-in-possession financing to maintain operations as it winds down the business, with its final stores expected to shutter by the end of June.

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JLL Commercial Real Estate and A&G will jointly market a Claremont, N.C.-based data center owned by Bed Bath & Beyond, as well as leases for warehouses and distribution centers in California, Georgia, Pennsylvania, Nevada, New Jersey and Texas, which range in size from 189,000 to more than 1 million square feet. Several of these assets have below-market, fixed-rate leases with renewal options, Mike Matlat, senior managing director at A&G, said in a statement.

Likely bidders

Landlords are likely bidders for the assets, Matlat said in his prepared remarks. Matlat described the opportunity to acquire these leases as a way for junior anchor tenants to meet their growth targets by backfilling second-generation space, noting that the firm expects interest from national, regional and local players. There have been few opportunities to acquire leases at auction over the past several years, Todd Eyler, senior managing director at A&G, noted in the same statement.

A number of national chains, some of which have already taken over former Bed Bath & Beyond locations, could be contenders for the company’s leases. TJ Maxx and Ross Dress for Less recently opened new stores at former Bed Bath & Beyond locations in Watertown, N.Y., and White Lake Township, Mich., respectively.

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