More Than 250 Tuesday Morning Leases To Be Auctioned Off
As discount retailer Tuesday Morning goes through its second bankruptcy in three years, it is looking to dispose of hundreds of locations.
Advisory firm A&G Real Estate Partners has been tapped to auction off more than 250 retail leases belonging to the troubled home furnishings company, it announced Thursday.
The lease sales come as part of Tuesday Morning’s Chapter 11 restructuring, a process that kicked off last month, which the furniture seller said it hoped would help it “transform into a nimbler retailer.” The retail space being auctioned off totals more than 3.3M SF, with most stores between 10K SF and 20K SF, A&G Senior Managing Director Mike Matlat said in a statement provided to Bisnow.
"It has been a while since we have seen such a large portfolio of leases become available in a Chapter 11. These are excellent, high-occupancy centers with good co-tenants in major markets," Matlat wrote in an email. "With limited new construction, second-generation space is in high demand for retailers looking to meet their expansion plans."
The 250 locations that will be auctioned are just the first round of store closures, according to the release. Stores being auctioned range from 6K SF to 28K SF, and include locations at strip centers as well as standalone stores. Most leases offer five or more years and include renewal options.
This is A&G’s second time working with Tuesday Morning — when it filed for bankruptcy in May 2020, A&G worked with the retailer and its landlords to restructure 490 lease agreements. It closed 200 locations during that process.
Tuesday Morning was operating in 40 states as of June 2021, where it employed around 1,600 full-time employees and 4,700 part-time workers, per the company’s most recent annual report.
Dallas-based Tuesday Morning is closing more locations in some of the states that saw significant population booms due to pandemic-era migration, with plans to close as many as 24 stores apiece in Texas and Florida and 17 in North Carolina. The retailer also plans to close 31 stores in California, 16 in Colorado and 12 stores in both Virginia and Georgia, according to a list of closing stores on its website.
Stores that will be auctioned are seeing interest from retail and non-retail users alike, including potential medical tenants, Matlat said. The advisory firm is seeing the strongest demand for spaces around 10K SF with good frontage, he said, while interest in markets including Dallas, Houston, Phoenix and Tampa is indicative of the demand for high-quality retail locations in those markets.
Tuesday Morning’s reorganization — unlike its 2020 bankruptcy — comes as national retail vacancy hit its lowest levels since the 2008 recession and store openings outpacing closures in 2022.
