by Elaine Misonzhnik July 27th, 2011
As Borders announced its liquidation early last week, reports surfaced that Books-a-Million, a rival bricks-and-mortar book seller, wanted to purchase up to 35 of its remaining stores.
The deal would have helped to cut down the amount of space Borders is about to dump on the market and saved some of its landlords the headache of searching for an alternate tenant.
Unfortunately, the deal is now off, according to a report in The Detroit News.
The two booksellers apparently couldn’t come to an agreement before Borders’ going-out-of-business sale began last week.
“We worked exhaustively in an effort to acquire these stores and reach agreements with all of the parties whose consent was necessary,” Books-A-Million CEO Clyde B. Anderson said in a statement late Monday. “Unfortunately, we were unsuccessful.”
The nixed sale won’t necessarily stop Books-a-Million from leasing former Borders locations directly from their landlords. For example, Cafaro Company, an Ohio-based privately held mall owner, has just signed a deal with Books-a-Million to go into eight of its malls independelty of the Books-a-Million/Borders negotiations, according to a release the firm sent out this week.
The stores range from 2,300 to 20,000 square feet and include locations in Pennsylvania, Virginia, West Virginia, Ohio, Michigan and Iowa. Books-a-Million plans to open at Cafaro’s properties in the fall.
Related Topics: Management & Leasing, News, Retail, Retail Real Estate |
by Elaine Misonzhnik July 27th, 2011
Investors are showing a great deal of confidence in Dunkin’ Brands and its potential for growth. Yesterday, the firm, currently owned by the private equity consortium of Bain Capital Partners, Carlyle Group and THL Partners, filed for its long-awaited IPO.
Even in a market that hasn’t favored public offerings, Dunkin’s owners were able to price the coffee chain/ice cream shop operator at $19 per share, above the expected range and the offering is already oversubscribed, at 22.25 million shares.
Dunkin’s main appeal lies in the fact that the chain has yet to create a sizable presence on the West Coast of the United States. In recent years, as consumers have become more price-conscious, Dunkin’ made significant headway in its competition with Starbucks for the top spot in the U.S. coffee wars. But it has no presence in states like California and Washington, which remain Starbucks’ territory–at least for now.
According to an analyst quoted in the New York Times story:
“Part of the attraction of Dunkin’ Donuts is that there is significant opportunity for store openings,” said Bart Glenn, an analyst with D. A. Davidson & Company who also covers Starbucks, a Dunkin’ rival. “Dunkin’ has broad customer appeal, and they’ve done a good job of delivering high quality coffee.”
Update:
Dunkin’ shares are now trading at $25 apiece.
Related Topics: Investment, Management & Leasing, News, Retail, Retail Real Estate |
by Elaine Misonzhnik July 14th, 2011
CoStar released the latest results from its Commercial Repeat Sale Index (CCRSI), which shows that May was a very good month for commercial investment sales transactions.
Overall sale pair dollar volume rose 150 percent year-over-year, with retail sales increasing 23 percent. The index tracks repeat sales of properties as a base. In May, CoStar recorded 829 repeat sale transactions. (You can find the methodology for CoStar’s Index here).
Investment grade property sales volume also continued to rise significantly in May 2011 increasing more than 191 percent on a year-over-year basis. As a result, investment grade sales volume comprised 79. percent of total May sales volume, up substantially from 61.9 percent in April 2011.
Average deal sizes also continue to rise. According to CoStar, the average investment grade deal size in May 2011 was $33.2 million, nearly double the April 2011 average transaction size of $16.9 million. The average dollar size for the general index was $1.7 million in May 2011 as compared to the average April 2011
transaction size of $1.65 million.
What’s more, only 26.7 percent of retail sales pairs recorded in May were distressed.
As a result of improving market conditions, CoStar’s CCRSI Index rose 1.6 percent in May, though it is still 34.4 percent below its peak, recorded in August 2007.
The improvement in the investment sales market for commercial properties is largely due to where we are in the real estate cycle, according to Chris Macke, CoStar’s senior real estate strategist. According to a presentation he gave this afternoon:
There are a number of transactions out there where people are making some great buys and people are making some great sales. Timing is just as critical as [location].
Related Topics: Investment, News, Research, Retail Real Estate, Trends |
by Elaine Misonzhnik July 13th, 2011
Just in time to give more credence to the idea that mall landlords should give Apple stores anchor status, new research claims the chain accounted for an astounding one-fifth of all sales growth by U.S. publicly traded retailers in the first three months of the year.
According to a story in USA Today, Apple’s sales rose 80 percent year-over-year during the period from January through March, or by $4.6 billion, and they will likely keep that pace for the foreseeable future.
Apple sales are rising sharply outside the U.S. as well. In the Asia-Pacific region, sales rose 151% to $4.7 billion in the quarter that ended March 26. Europe sales were up 49% to $6 billion.
Analysts expect Apple’s sales to keep growing at a double-digit pace for the next few years. Morningstar analyst Joseph Beaulieu thinks Apple can achieve a 20% average revenue growth rate for the next five years, even without the introduction of new products.
Meanwhile, Apple seems to be exploring a new expansion strategy that could potentially pay off in spades. So far, the chain has mainly taken locations on high streets in major cities and in class-A malls. Now, Apple appears to be in discussion with at least two universities to operate within campus bookstores.
Earlier this year, Apple has been rumored to negotiate a deal with Yale University to occupy a former Barnes & Noble space there. Now, it might be looking to execute similar leases with Fairfield University in Connecticut and the University of Delaware.
It’s unclear at this point whether Apple wants to simply take over vacant university bookstore spaces or operate stores-within-stores with university booksellers or both. The deals in Connecticut and Delaware seem to involve taking space within an operating bookstore. Either way, given the multitudes of college campuses in the U.S. and Apple’s popularity with the college crowd, this might lead to dozens, if not hundreds, new Apple locations.
Related Topics: Management & Leasing, News, Research, Retail, Retail Real Estate |
Sanity Being Restored?
by David Bodamer August 9th, 2011
After yesterday’s carnage in retail REIT stocks, things are looking much better this morning. The losses have only been partially restored, but at least every firm is regaining ground.
No Comments Related Topics: Commentary, Investment, News, REITs, Retail Real Estate |