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Bed Bath & Beyond Store Closures Will Kick Off A Land Grab For Fast-growing Retailers

Bed Bath & Beyond, which filed for bankruptcy, is expected to soon close hundreds of stores.

That is likely to result in a land grab by retailers and other companies that are looking to expand.

It could be a particular good opportunity for low-price chains and dollar stores.

In strip malls across the country, Bed Bath & Beyond stores have "Closing Soon" signs.

For other retailers, those may as well be "For Rent" signs.

The home goods retailer, which filed for bankruptcy Sunday, won't only create opportunities for competitors to gain new customers and market share. Its shuttered stores will kick off a land grab for retailers hungry for additional space.

Bed Bath will join a list of other bankrupt companies, such as Kmart and Sears, that vacated spaces and made way for stores. Bed Bath has nearly 500 locations that could open up — between its 360 namesake stores and 120 Buy Buy Baby locations — for other companies to rent. It had already shuttered many spots, as it wound down 150 underperforming namesake storesand shut all 49 of its Harmon FaceValue beauty-chain locations.

The company's stores remain open and its website is still operating. Liquidation sales began this week.

Yet Bed Bath's coming closures are hitting at a good time, according to real estate firms and retail industry watchers. The retailer has locations in high-traffic suburban areas. Its stores are easily adaptable at their size — typically around 30,000 square feet, according to industry analysts. Off-mall shopping centers' vacancy rates are low and demand is high, especially as discounters grow and traditional mall players experiment with new concepts.

Former Bed Bath stores could turn into a variety of other retail spaces, said Deborah Weinswig, CEO of Coresight Research, a retail advisory group. They could become doctor offices for CVS or Walgreens, as the drugstore chains push into primary care, or turn into grocery locations for growing chains such as Aldi or Lidl, she said.

Some may be sliced into locations for multiple companies. Others may be backfilled by a single tenant.

Bed Bath's spaces are more move-in ready than Kmart and Sears locations because by and large they were better maintained, while the better-performing stores only "need a little light dusting," she said.

"In the past, I may have been a bit more concerned if we were to go through something like this, but I'm just not," Weinswig said. "I'm not worried at this point because of the fact you've had this tremendous change in terms of demand for physical spaces."

An appetite for space

Bed Bath & Beyond's stores will go on the market as the off-mall space is hot and shoppers are flocking back to stores.

Weaker retailers' locations thinned out during the fallout of the Great Recession and again during the Covid pandemic, said James Bohnaker, senior economist with Cushman & Wakefield. Now, a mix of stronger retailers are vying for space in similar strip centers, including dollar stores, off-price retailers, direct-to-consumer players like Warby Parker and Casper, and traditional mall retailers like Macy's.

Vacancy rates for shopping centers fell to 5.6% in the first quarter of this year, the lowest level since commercial real estate firm Cushman & Wakefield began tracking in 2007. Such locations, which often include a major grocer and businesses like gyms and restaurants, have gained popularity because of their convenience and proximity to growing communities, new subdivisions and wealthier shoppers.

Retail real estate had a banner year in 2022 in the U.S., as store openings outpaced closures for the first time since 2016, according to Coresight Research.

Major retailers opened roughly 2,500 net new stores in the U.S. In 2022, the firm found.

As of April, discounters are leading the way so far this year with announced store openings in the U.S.

Dollar General: 1,065 stores

Family Dollar (owned by Dollar Tree): 328 stores

Dollar Tree: 308 stores

Five Below: 199 stores

JD Sports: 134 stores

TJX Companies (includes T.J. Maxx, HomeGoods, Marshalls): 102 stores

Wawa: 100 stores

Burlington Stores: 96 stores

Ross Stores: 92 stores

Bath & Body Works: 92 stores

Tractor Supply: 70 stores

Source: Coresight Research data

Industry watchers expect retailers to expand at a similar pace this year, even as interest rates rise and the economy gets choppier.

There are several factors driving the demand for retail space, according to Coresight's Weinswig: Retailers have more money after shoppers' pandemic-fueled spending spree. Companies see brick-and-mortar stores as both billboards for their brands and fulfillment centers for their e-commerce orders. Retailers also are adding technology to better understand customer behavior, as Google and Apple's privacy changes make it harder to track them online. And hybrid work schedules mean shoppers visit stores throughout the day.

Discounters and off-price players, such as Dollar General, Dollar Tree and TJX Companies are leading the way with big plans for expansion, according to Coresight. They could become potential tenants, depending on how the former Bed Bath spaces are sliced and diced.

Bed Bath's vacated boxes could also be ideal spots for gym chains such as LA Fitness, Crunch and Planet Fitness, as well as off-price banners like TJX-owned HomeGoods and Marshalls, said Matthew Harding, CEO of Levin Management. The New Jersey-based firm is a landlord and property manager with more than 100 properties in five states and Washington, D.C. Its properties include some former and current Bed Bath locations.

Even mall players may take a look. Foot Locker, for instance, closed an estimated 187 stores in the U.S. In 2022, more than any other retailer, according to Coresight. The footwear company's CEO Mary Dillon, however, has spoken about plans to open new locations in strip centers. Macy's has also opened stores beyond malls.

Think of it as retail's circle of life.

Kimco Realty, a real estate investment trust with 27 Bed Bath stores in its portfolio, said it already has single tenants teed up to fill most of those locations. Through a spokesperson, the company said it can't yet disclose names, but they include a mix of off-price, full-price, entertainment, grocery, furniture, and automotive or appliance stores.

At a strip mall in the Phoenix area, one of Kimco's former Bed Bath & Beyond locations recently reopened as a Burlington store.

In one shopping center in Edgewater, New Jersey, a HomeGoods (owned by T.J. Maxx-owner TJX Companies) is moving into a former Bed Bath & Beyond, according to Levin Management.

In a Bergen County location in the state, negotiations are underway about turning a two-story Bed Bath & Beyond into multiple properties, according to Rick Latella, an executive managing director in the retail valuation practice of Cushman & Wakefield.

He said the owner is close to a deal with off-price retailer, Ross Stores, for one floor. And on the other floor, possible tenants include REI, Petco and Barnes & Noble.

Walmart's betting big on automation to boost productivity and profits

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Banner Tucson Weight-loss Program Tailor-makes Diet, Exercise Plans

Cindy Colbert lost her husband in March 2020, and a week later, the world shut down.

With businesses shuttered and the pandemic lockdown in effect, Colbert says she sat at home and ate her feelings. As time passed and she gained weight, she found she was in constant pain and becoming short of breath while walking from room to room in her home.

During her annual physical in 2021, Colbert, who weighed in at more than 300 pounds, discussed her asthma and pain with her primary care physician, who asked her if she was ready to take action.

"For the first time, I felt when she asked if I was ready to do something about it, I was ready," Colbert, 58, said. "I had gotten to that point and I couldn't live like that anymore. I was ready to make those changes."

Colbert was referred to Banner-University Medical Center Tucson's Clinical Weight Loss Program, which seeks to help people improve their health by promoting long-term lifestyle changes related to weight loss.

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A little over a year later, Colbert was down 100 pounds, and she continues to lose weight, thanks to the changes she made.

The program, headed by Dr. Amit Algotar, offers medical, psychological and behavioral support; nutritional evaluation and counseling; and an individualized exercise and training plan.

Banner officials say that while other doctors may prescribe weight loss medications, no other Tucson hospital has a multi-modality program like theirs that offers surgical and nonsurgical weight loss options. Over the past decade, it has helped thousands of people achieve their weight loss goals and improve their overall health and well-being.

'Being open is most important thing'

The clinical weight loss program, located at Banner-University of Arizona South, 2800 East Ajo Way, started as an employee wellness program, but by 2013, it was available to all patients, says Algotar, who joined in 2016.

It's open to non-smokers between the ages of 18 and 65 with a body mass index over 40, or over 35 and combined with illnesses such as diabetes, who aren't pregnant.

The program is covered by insurance with out-of-pocket costs determined by each person's policy, Banner says. Referrals are required.

Algotar called it a comprehensive medical bariatric program that involves a multitude of dietary plans and medications as options for weight loss. But it's more than diet and exercise. Algotar and other providers look at the patient's full medical picture, including other diagnoses and mental health.

"Every patient is different. Every patient's needs are different," Algotar said. "We don't have a cookie cutter approach and we don't hand out the same meal plans to everybody who walks in the door."

The doctors who run the clinic aren't surgeons, but they do work with a surgical team. If participants are interested in bariatric surgery, their progress will be evaluated after several months in the program to determine if surgery is an appropriate option.

Algotar said it's all about doing what works for the patient.

Cindy Colbert "was open to ideas. She was open to doing different things, open to researching, open to finding new recipes," Algotar said. "Being open is the most important thing in terms of finding that thing that works for the patient."

After working together for a year and a half, Algotar and Colbert finally met in person in February, having conducted all of their sessions via Zoom. Algotar called the advancement of telemedicine a silver lining of the pandemic, as the program now serves patients across the state.

'Awareness made a big change'

Colbert said that the first time she met with Algotar, he just asked her to pay attention to what she was eating, including when, how much and how she felt.

"The first couple of weeks, just being aware of what I was eating made me make a little bit of changes. Not necessarily what I was eating, but when I was eating," Colbert said. "Even though I hadn't made any dietary changes, I still started losing weight because I wasn't eating right before bed or I wasn't eating a full bowl of nachos. Just that awareness made a big change."

From there, Colbert reduced her carbohydrate intake to 50 grams a day. She started looking at ingredients and changing the foods she ate.

"Basically I had changed to eggs for breakfast, a salad for lunch and chicken with some kind of vegetable for dinner," Colbert said. "I started dropping weight pretty quickly based on how much I was moving and because I was getting the right amount of food."

A decade ago, when Colbert first tried to lose weight, another doctor had told her she needed to walk 30 minutes a day.

"I'm like, 'I can't even walk to the corner without being in pain, how am I supposed to do this for 30 minutes?'" she said.

But when Colbert first connected with Algotar, he suggested she just walk through the house from one room to another and do a circuit.

"He said, 'If you get tired or if your back starts to hurt, sit down. You don't have to do it all at one time,'" Colbert said. "So long as you get up and move, you can move 30 minutes a day in five-minute spurts."

She started tracking her steps and finding ways to get out and walk while still beating the summer heat.

"You get set on you've got to go out and jog or you've got to lift weights, and that's not it. It's just getting up and eating the right things and movement," she said. "Walk, run, swim, hike. Go to the zoo and walk through the zoo. That's exercise. It doesn't have to be strenuous."

Colbert called Algotar her biggest cheerleader throughout her weight loss journey, saying he helped her stay on top of things and think about events that could affect the food she eats, including holidays and family gatherings.

Because of the changes Colbert made through the program, she's able to be active and play with her grandchildren. She recently moved and, unlike the last time, was able to help carry boxes up and down stairs without breaks.

"Last time, the only thing that I could do was sit on my butt and pack boxes," she said.

Her A1C — a blood test that measures average blood sugar levels over the past three months — has dropped below the diabetic threshold.

"A lot of older people think, 'I can't do it. I'm too old.' That was one of the things I thought," Colbert said. "But you're never too old. As long as you can move, you can do it."

'A huge biology behind it'

Algotar said that while Colbert's approach has worked for her, everyone is different, and every diet and exercise plan looks different.

"For Cindy, the low-carbohydrate approach has worked fantastic. At the same time, for somebody else, this may not be the approach," Algotar said.

"They may work better with a low-calorie approach or intermittent fasting approach or time-restricted feeding approach or a dash diet (to help treat or prevent high blood pressure) or a vegetarian diet. Every approach has its positives and negatives and each approach could be useful for a different kind of individual."

Algotar, who has been researching obesity since 2003, said that for many people, maintaining weight loss is the real challenge.

"It's not just about behavior, there is a huge biology behind it. Our bodies hate losing weight and that's because our bodies consider fat as an insurance policy against starvation," he said. "Way back when ... Starvation was a real problem that could have wiped out our species."

There are hormones that try to push a person to eat more as they gain weight, Algotar said, adding that the key is staying focused and being mindful of what is happening.

"We don't have a structured program, it's just based on what they're presenting with and what the patient's needs are," Algotar said. "If a patient is ... Like Cindy, we let them do their thing ... And see them prosper, see them flower, see them be successful."

Algotar is also involved with the Arizona Obesity Organization, which works to help educate healthcare providers against bias and provide effective treatment.

"A lot of times patients experience a lot of bias, a lot of negative attitudes, even from health care. The message is, 'Eat less and exercise... And if you don't do it, it's your fault,'" he said.

"For patients who are thinking about weight loss who are thinking about trying to see what they can do, I don't want them to feel defeated in any way, because there is hope, there are options."

Get a roundup of solutions reporting from the Arizona Daily Star at linktr.Ee/starsolutions. Video by Caitlin Schmidt / Arizona Daily Star.

By Caitlin Schmidt Arizona Daily Star

Montecito Medical Acquires Medical Office Building In Phoenix Area

Montecito Medical, a leading acquirer of medical office properties nationwide, has acquired a 68,000-square-foot medical building in Peoria, Arizona.

This press release features multimedia. View the full release here: https://www.Businesswire.Com/news/home/20230425006089/en/

Banner Health - Peoria, Arizona (Photo: Business Wire)

The building is 100% occupied by Banner Health, a leading health system in the Southwest headquartered in Phoenix.

"We are excited to add this outstanding medical asset to our portfolio and to build on the relationship we have established with Banner Health," said Bryan Brown, Senior Vice President of Acquisitions at Montecito Medical.

The JLL Healthcare Capital Markets Advisory team, consisting of Mindy Berman, Matt Dicesare, and John Chun, along with Phoenix market leader Pat Williams, represented the seller.

At the property, which includes a multi-specialty ambulatory surgery center (ASC), Banner Health provides surgical and clinical services, advanced imaging, and primary care.

Operating 30 hospitals across six states, Banner Health is the largest private employer in Arizona and one of the largest secular nonprofit health systems in the United States.

"We are thrilled to expand our extensive medical real estate footprint in the Phoenix market, an area known for its thriving healthcare industry and growing population," said Chip Conk, CEO of Montecito Medical. "We look forward to announcing more acquisitions in the coming months."

About Montecito Medical

Montecito Medical is one of the nation's largest privately held companies specializing in healthcare-related real estate acquisitions and partnering with physicians and developers to fund development of medical real estate. The company also supports providers with a suite of AI-powered technology solutions that increase revenues, reduce costs and build physician wealth. Since 2006, Montecito has completed transactions involving more than $5 billion in medical real estate. Headquartered in Nashville, TN, the company has been named for five consecutive years as a "key influencer in healthcare real estate" by GlobeSt.Com and the editors of Real Estate Forum. For more information, please visit www.Montecitomac.Com.

View source version on businesswire.Com: https://www.Businesswire.Com/news/home/20230425006089/en/

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