If The Space Is So Great, Why Is It Being Auctioned?

If the space is so great, why is it being auctioned off?

 

I spend a part of my business day seeking opportunities for my valued clients, students, and connections, and am always working on at least one.There are endless stories about repurposing, transforming historical buildings, billion dollar upgrades, and so on. 

 

Many of us are aware that JoAnn Fabrics is going under, and understand that happens when retailers don't have a solid strategy. The big shock for me came this morning when I read that leases from 11 stores with at least 10,000 square feet each are going up for auction. Auction??

 

It would seem there would be at least one broker that could be working those spaces, whether talking with neighbor tenants, competitors, retailers, and service businesses about taking or sharing those locations. These leases are spread around different communities which may have different needs.

 

Empty spaces in malls and shopping centers don't help anyone. If a storefront "couldn't sell at auction and the business in there went bankrupt", it's not like there will be market demand moving forward. You can't tell me that how a property is positioned doesn't matter.

 

From my viewpoint, no one wins from this decision. If these leases sell at auction, the buyer has the task of filling the space - but with no certainty of eventual renewal at a favorable price. The current owners get minimal return, even if it does go to creditors (who deserve better). At the same time, plenty of opportunities for brokers, landlords, developers, investors, lenders, and contractors go down the drain.  

We need to create opportunities from realistic situations.

 

https://jerseydigs.com/joann-fabrics-auction/