Tenant Update

Pacific Sunwear of California Inc. has won court approval to exit Chapter 11 bankruptcy.   The chain’s reorganization plan was approved by the court on Tuesday. Under the plan, the chain will give all its stock to affiliates of private equity firm Golden Gate Capital, its senior lender.   

Bids to assume the leases of 120-plus Hastings Entertainment stores will not be accepted after Sept. 15, announced RCS Real Estate Advisors.   The chain’s inventory was earlier purchased by Hilco Merchant Resources and Gordon Bros. Retail Partners after the music, movie, and video game chain was unable to emerge from Chapter 11. Hastings Entertainment was founded in 1972 by Sam Marmaduke, who as head of Western Merchandisers first convinced Walmart to carry music and continued to supply the chain until 1994.  

Lowe’s Foods rang in retail this week at Morganton Park South in Southern Pines, North Carolina, opening a 50,000-sq.-ft. anchor store in the center that is part of the 188-acre Morganton Park master-planned community.   Lowe’s, which recently executed a re-branding, is a fixture in North Carolina, where it has done business since 1954. Its neighbors in the center are still to be determined. Leasing agent Lincoln Harris reports that most of the 21,000 remaining square feet in the center remains available.  

Though it forecasts a stronger-than-anticipated closure season, Cushman & Wakefield sees average retail rents ending the year 4.6% higher than they were in 2016.   The company’s U.S. Macro Forecast released this week said that consistent demand for space in Class A retail centers is the biggest factor in rental-rate growth. Cushman analysts also predict that 2016 will see a drop in the retail vacancy rate to 5.8% from 6.6% last year — though they see it moving back up to 6% in 2017.  

Forest City Realty Trust may be on its way to having a greatly reduced investment in the mall industry and a bigger one in apartments and office assets.   The Cleveland-based firm announced it is reviewing strategic alternatives for its retail portfolio. Forest City holds ownership stakes in 14 regional malls across the country and 19 specialty retail centers, mostly in New York City. The East River Plaza, which fronts the FDR Drive in Manhattan at 116th Street, is a Forest City property.  

Macy’s recently announced plans to close some 100 stores could do more than leave developers looking for a new anchor.   Nearly $30 billion of bonds backed by commercial mortgages are exposed to the retailer, reported Bloomberg, citing a note by Morningstar Credit Ratings. And more than $3.6 billion in loans would be affected by the closing of 28 stores that Morningstar identified as being most at risk, the report said. 

The Northfield Crossing Shopping Center in Murfreesboro, Tennessee, that featured a Hastings Entertainment store has been purchased by Baker Storey McDonald Properties on behalf of an unnamed client. Terms of the sale were not disclosed.   Meanwhile, RCS Real Estate Advisors announced it would be auctioning off 120-plus store leases for the bankrupted music, movie, and video game retailer. The chain’s inventory was purchased by Hilco Merchant Resourses and Gordon Bros. Retail Partners in a Chapter 11 filing.   

After a long, post-recession lull, leasing activity at shopping centers and strip malls in the Phoenix area is picking up, according to a report in Tempe’s East Valley Tribune.   Local real estate investor Michael Pollack is so bullish on the scene that he said he envisions tenant waiting lists as a possibility for the near future.    “We are in a red-hot market right now,” said Pollack, who invests in financially distressed centers and renovates them.