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Santa Ana, California-based Red Mountain Group bought 20 empty Big Lots stores for $47.5M in an all-cash, off-market deal from the discount retailer.
The stores are spread across 20 cities in four states, with 16 of the 20 buildings in California, according to a release from the company. The sale included 3.5 acres for future retail development.
Red Mountain, a privately owned company that deals in nationwide retail redevelopment, locked in eight major tenant leases prior to the close of escrow.
"With our sustainable debt and equity, we are able to execute portfolio deals of this magnitude," Red Mountain Group CEO Michael Mugel said in a statement. "We have been, and continue to be, a reliable liquidity resource for both private owners and public retailers that own their real estate."
Late last year, JLL reported a jump in demand for vacant big-box retail stores on the West Coast. It closed four such deals in November.
"Demand for available infill development sites is rapidly expanding in the West as investors continue to look for opportunities to redevelop these former boxes into higher-density residential uses or backfill the space with superior retail tenants looking for quality locations," the company said in a release announcing the sales.
Landlords of larger retail spaces are feeling more confident about backfilling these spaces, The Wall Street Journal reported in a story about the financial struggles of Bed Bath & Beyond. Part of that confidence comes from news of several big-box retailers' plans to expand.
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