By hxdbzxy @ Shutterstock.com
Esther Fung reports at The Wall Street Journal that some companies have begun taking a chance on buying historically inexpensive retail real estate. She writes:
Struggling shopping malls are finding an unexpected boost from bargain-hunting retail operators.
Such was the case in Stamford, Conn., where the Stamford Town Center mall lost popular tenants like H&M, Apple Inc. and Talbots to a competing shopping center that opened last year only 8 miles away.
In October, home-furnishing company Safavieh purchased Town Center mall.
Safavieh plans to open a home-design center and relocate its nearby home furnishings store to the mall, said Arash Yaraghi, whose family runs the Port Washington, N.Y.-based company.
But, he added, “price is always the deciding factor.” Safavieh paid $20 million for a property that was appraised at $64 million last year, according to a Stamford government website.
The coronavirus pandemic and its debilitating effect on shopping centers are providing growing retail operators with an opportunity to achieve something many have hoped to do for a while—become owners.
“We have seen retailers zeroing in on buying opportunities,” said Ariel Schuster, vice chairman at real-estate firm Newmark. “Historically, the most active buyers have been in the luxury sector.”
In a recent example, Swiss high-end clothing retailer Akris purchased three buildings on New York City’s Madison Ave. for $45 million—a decade-low price for the ritzy neighborhood on a per square foot basis—including the building that accommodates its Manhattan store.
Other retailers are taking advantage of the times to upgrade their rental space. Home Depot Inc. is planning to relocate its basement store in Manhattan’s Upper East Side a few blocks away to a four-story store currently occupied by Bed Bath & Beyond Inc. The home-furnishings retailer, which has struggled with falling sales for years, is not renewing its lease as it works to close 63 stores by the end of its current fiscal year.
Read more here.
