The chain includes 13 stores under the Drug Emporium name, two each under the Big A and Drug Barn nameplates and one each under the Camelot Drugs and Drug Fair brands. All are located in California and the portfolio has an aggregate of 433,142 sf.
The units range in size between approximately 10,000 sf and 31,800 sf. Lease terms and rent rates vary. As an example, the base rent of the largest unit, a 31,800-sf Drug Emporium in Fullerton, is $11.48 per sf, and the lease expires on Dec. 11, 2008 with one five-year extension option. Base rent for a 27,750-sf Drug Emporium in Anaheim is $9.48 per sf, and the lease expires March 31, 2009.
The leases are "in some of the top performing strip centers in the country," according to Andy Graiser, DJM's co-president. He says there has already been significant interest among retailers and the landlords.
Subject to today's court ruling on the plan, bids will be due at noon Pacific Time on Dec. 17, and the hearing and auction will take place in the courtroom at 255 E. Temple St. in Los Angeles at 10 am Pacific Time on Dec. 21. James Avallone of DJM tells GSR the judge could change the date on which bids are due and the date of the auction.
In its court filing, Big A stated its belief that the leases have an equity value of at least $5 million. "That is anticipatory on Big A's behalf," Avallone says, and declines to suggest what the lease portfolio will command. "We do not expect to sell it as a single portfolio," he says, "although there may be some small packages along with individual unit-lease sales."
Bidders are required to submit a written amount for each individual lease along with a deposit equal to 10% of the bid amount or $10,000, whichever is greater. The transactions are cash only unless the bidder is a landlord for a particular property. In that case, the landlord can submit a credit bid up to any rental arrears on the property and pay cash for the balance of the offer. The deposit requirement is somewhat different for landlord bidders and for private sale, or "stalking horse" agreements.
Big A expects to liquidate its inventory through the end of this year. According to the court document, the properties will be available Jan. 1, 2008.
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