Neiman Marcus Group, the Dallas-based department store operator, is taking proactive measures to raise funds amidst its ongoing bankruptcy proceedings brought on by the Covid-19 pandemic. To aid in this effort, the company has enlisted the help of A&G Real Estate Partners to market the leases of four of its locations. As part of its cost-cutting strategy, Neiman Marcus has already begun closing down most of its Last Call stores, and it is now considering the closure of some of its full-line stores as well.

The leases being marketed are for Neiman Marcus stores located in Walnut Creek, California; Washington DC; Palm Beach, Florida; and Bellevue, Washington. These leases have varying expiration dates, with the Palm Beach location set to expire in 2026 and the Bellevue store lease extending all the way to 2040. Additionally, each lease comes with options for extensions, with the Walnut Creek location lease offering the possibility of an extension until 2112.

A&G Real Estate Partners describes these leases as “long-term, multiple-option leases,” making them particularly attractive for potential conversion into alternative uses such as hotels, offices, or residential spaces. Neiman Marcus is currently evaluating its store footprint in order to maximize revenue, profitability, and its omnichannel strategy. It should be noted that the marketing of these leases does not necessarily indicate the closure of the stores; rather, it is a way for the company to unlock the value of these properties.

In June, Neiman Marcus obtained approval for a $675 million debtor-in-possession financing package to ensure the continuity of its business throughout the bankruptcy proceedings. The company is currently burdened with a total debt of $5 billion, largely stemming from two leveraged buyouts within a decade. However, it expects its post-emergence capital structure to alleviate approximately $4 billion of existing debt, with no significant upcoming maturities.

Sources:
1. CNBC
2. Dallas News