Bed Bath & Beyond unlocks capital via major real estate deal

Bed Bath & Beyond Inc. has entered into an agreement to sell approximately half its real estate as it looks to generate capital. 

The struggling home furnishings retailer has completed a sale-leaseback transaction with an affiliate of Oak Street Real Estate Capital, generating more than $250 million in net proceeds. The properties sold represent approximately 2.1 million sq. ft. of commercial space, including retail stores, a distribution facility and the company’s headquarters space in Union, N.J. Bed Bath & Beyond will continue to occupy the properties through long-term leases.

Bed Bath & Beyond said it plans to use the proceeds from the transaction to reinvest in its core business and transformation efforts, to fund share repurchases, and to reduce outstanding debt, or a combination of these tactics.

"We are pleased to complete this sale-leaseback transaction," said Mark Tritton, who took the reins as president and CEO of Bed Bath & Beyond in November. "This marks the first step toward unlocking valuable capital in our business that can be put to work to amplify our plans to build a stronger, more efficient foundation to support revenue growth, financial stability and enhance shareholder value."

As previously announced, Bed Bath & Beyond, together with outside financial advisors, is reviewing its portfolio of retail concepts which, in addition to its namesake division, include Christmas Tree Shops, buybuy Baby, Harmon Face Values, Cost Plus and Cost Plus World Market,  and owned real estate to optimize its asset base and enhance shareholder value. In connection with the review, the retailer said it will continue to evaluate certain remaining owned real estate.