99 CENTS ONLY STORES ANNOUNCE BANKRUPTCY SALE OF 377 PROPERTY PORTFOLIO THROUGH HILCO REAL ESTATE AND JEFFERIES

Rhea-AI Summary

99 Cents Only Stores announces bankruptcy sale of 377 property portfolio through Hilco Real Estate and Jefferies, including prime retail spaces in major cities like Houston, Las Vegas, and Los Angeles.

Insights

Financial Analyst

The bankruptcy sale orchestrated by Hilco Real Estate and Jefferies for 99 Cents Only Stores encompasses a significant volume of assets, which underscores the magnitude of the company's financial distress. The sale involves both owned and leased properties, which implies that the financial recovery efforts are extensive. The presence of these assets in major retail corridors can make them attractive to investors seeking prime real estate, potentially influencing commercial property market values in those areas.

From a business perspective, the liquidation of such a large portfolio could have a two-fold effect. On one hand, it may saturate the market, affecting property values and yields, especially if the sales are rushed. On the other hand, it may present opportunities for competitors or other retailers to acquire prime locations at a discount. The impact on the stock market is likely to be more nuanced, depending on the exposure of publicly traded companies to these assets or their interest in acquiring them.

Real Estate Development Analyst

The announcement highlights the redevelopment potential of the properties being sold, particularly the three sites with vacant land parcels. The 14-acre lot in San Jacinto, California, presents a unique case for developers. Situated in a prime retail intersection and offering significant development space, this kind of asset could attract substantial interest from commercial developers looking for new project locations.

However, developers must weigh the potential returns against the risks associated with large-scale developments, especially in a post-bankruptcy context where the stability of local consumer markets may be uncertain. The redevelopment of these sites could stimulate local economies by creating jobs and attracting new businesses, but there may be challenges such as zoning restrictions or community pushback to consider.

Retail Market Analyst

The sale of the 99 Cents Only Stores portfolio represents a pivotal moment for the retail sector, particularly in the discount retail market. The availability of these properties offers a chance for existing retailers to expand their footprint or for new players to enter the market. The remarketing of these locations may also reflect a shift in the competitive landscape, where retailers reassess their brick-and-mortar strategies.

For stakeholders, the short-term benefits may include the acquisition of retail spaces below market value, yet the long-term implications hinge on the ability of these locations to drive foot traffic and sales in a retail environment increasingly influenced by e-commerce. Furthermore, the impact on the local communities formerly served by 99 Cents Only Stores could be profound, with the loss of a low-cost retail option potentially leading to a retail gap that other businesses will need to fill.

NORTHRBOOK, Ill., April 15, 2024 /PRNewswire/ -- Hilco Real Estate, LLC (HRE), in collaboration with Jefferies LLC, is managing the sale of 377 real estate assets, encompassing 44 owned and 333 leased properties, as part of the bankruptcy Chapter 11 filing of 99 Cents Only Stores LLC. Outside of the real estate sales, Hilco Merchant Resources will be overseeing the liquidation efforts, including the sale of all inventory and fixtures.

Found in major cities like the Dallas-Fort Worth and Houston area, Phoenix, Las Vegas and Los Angeles, these properties lie in some of the respective area's most coveted retail corridors. Among the highlights of this expansive portfolio are several marquee properties situated along iconic thoroughfares such as Westheimer Road and Broadway Street in Houston, Texas, Flamingo Road and Tropicana Avenue in Las Vegas, Nevada, and Sunset Boulevard and Pico Boulevard in Los Angeles, California. The complete list of properties can be viewed on 99CentsRESales.com.

Known for their extensive array of products including groceries, household goods, health and beauty products and more, 99 Cents Only Stores vary in size from 5,200± square feet to 66,500± square feet. With an average size of 23,000± square feet, the portfolio boasts prime retail space ideal for reuse by a variety of similar or alternative users. While investors and developers are encouraged to consider the ongoing grocery and retail potential, there are compelling opportunities for redevelopment as well. Notably, three sites feature vacant land parcels, with a standout being an expansive 14± acre lot in San Jacinto, California. Surrounded by a mix of residential neighborhoods and commercial districts, this specific location presents exciting prospects for significant development endeavors at the city's most desirable retail intersection.

Joel Schneider, senior vice president at Hilco Real Estate, emphasized the importance of these 99 Cents Only Stores' locations, stating, "HRE's announcement of these sales underscores the value of these properties. We understand the significance of these storefronts and encourage buyers to continue serving the community as a one-stop-shop retail provider." He continued, "We invite investors and developers to explore the compelling opportunities they present whether retail use or redevelopment."

The sale is being conducted by Order of the U.S. Bankruptcy Court for the District of Delaware. All bids must be submitted on the approved asset purchase agreement available for review and download from 99CentsRESales.com.

Interested buyers should review the bid procedures, available on 99CentsRESales.com, outlining the requirements to participate in the sale process. For further details about the owned locations, please contact Steve Madura, Joel Schneider and Michael Kneifel at 99CentsOwned@hilcoglobal.com and the Jefferies team at 99CentsRE@Jefferies.com. For further details about the leased locations, please contact Matt Tabloff and Adam Humerick at 99CentsLeased@hilcoglobal.com and the Jefferies team at 99CentsRE@Jefferies.com. For further details about the on-going sale of 99 Cents Only Stores' inventory and fixtures, please contact Alex McKeown at amckeown@hilcoglobal.com.

To learn more about the sale process and terms or to obtain access to due diligence documents, please visit 99CentsRESales.com or call (855) 755-2300.

About Hilco Real Estate
Hilco Real Estate ("HRE"), a Hilco Global company (HilcoGlobal.com), is headquartered in Northbrook, Illinois (USA). HRE is a national provider of strategic real estate disposition services. Acting as an agent or principal, HRE uses its experience to advise and execute strategies to assist clients in deriving the maximum value from their real estate assets. By leveraging multi-faceted sales strategies and techniques, aggressive repositioning and restructuring experience, a vast and motivated network of buyers and sellers, and substantial access to capital, HRE exceeds expectations even in the most complex transactions.

About Jefferies
Jefferies (NYSE: JEF) is a leading global, full-service investment banking and capital markets firm that provides advisory, sales and trading, research, wealth, and asset management services. With more than 40 offices around the world, we offer insights and expertise to investors, companies and governments. For more information: www.jefferies.com.

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SOURCE Hilco Real Estate

FAQ

What is the significance of the 377 property portfolio sale announced by 99 Cents Only Stores?

The sale includes 44 owned and 333 leased properties managed by Hilco Real Estate and Jefferies as part of the bankruptcy Chapter 11 filing of 99 Cents Only Stores.

Where are some of the key locations of the properties being sold by 99 Cents Only Stores?

The properties are located in major cities like Dallas-Fort Worth, Houston, Phoenix, Las Vegas, and Los Angeles, with prime retail spaces along iconic thoroughfares.

What types of products are typically sold at 99 Cents Only Stores?

99 Cents Only Stores offer a wide range of products including groceries, household goods, health and beauty products, and more.

Who is managing the sale of the 377 property portfolio for 99 Cents Only Stores?

Hilco Real Estate and Jefferies are collaborating to manage the sale of the 377 property portfolio for 99 Cents Only Stores.

Where can interested buyers find more information about the sale process of the properties?

Interested buyers can find more information about the sale process and bid procedures on 99CentsRESales.com.