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More Toys R Us Properties Hit Auction Block

Many of Bankrupt Chain’s Assets in Prime Locations
June 28, 2018
More than 120 Toys R Us stores are now on the auction block, with the last of the company's U.S. stores scheduled to close Friday.

A Virginia bankruptcy court on June 28 approved an initial bid date of July 16 for 123 Toys R Us properties owned by Toys R Us Property Co. II LLC. An auction for the bankrupt company’s intellectual assets is set for Aug. 6.

In addition, initial bids on 12 owned retail boxes and three other Toys R Us spaces owned by Toys R Us Delaware are due July 10, with an auction date of July 12.

The company’s portfolio includes 112 owned stores, 11 ground leasehold interests and 10 other assets with income potential. The vast majority are on the East Coast and in the Midwest.

Financial advisory and asset management firm Lazard is the investment banker and A&G Realty Partners is the real estate broker handling the sale.

"It’s rare to have this many owned properties that come on the market at the same time, with this quality and caliber of real estate," said Emilio Amendola, co-president of A&G Realty Partners.

Amendola compared the Toys R Us offering to those of Heilig-Meyers, a retail furniture store chain that went bankrupt in 2000, with one caveat - the Toys R Us stores are in much better locations.

The Toys R Us stores are located in 29 states, with 18 each in Pennsylvania and Ohio. A&G Realty said Toys R Us has invested $1.5 million, on average, in each retail asset since 2002.

Brad Umansky, president of Rancho Cucamonga, CA-based Progressive Real Estate Partners, said the topnotch conditions of many stores will appeal to retailers, but he also said other developers will eye the properties with interest.

"I’ve already heard of people talking about it," he said.

The order approving the auction was issued in U.S. Bankruptcy Court for the Eastern District of Virginia.

The company, based in Wayne, NJ, filed for Chapter 11 bankruptcy last September. It once operated in 735 locations but has not reported a profit in five years.

Toys R Us is closing its remaining 200 or so U.S. stores by Friday. It will continue to operate some stores internationally.

Rob Smith, Retail Reporter  CoStar Group   

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