TUCSON, ARIZONA, February 7, 2023 — Orange County-based Red Mountain Group in Santa Ana, CA, has acquired 20 fee-simple former Big Lots stores from Big Lots for $47.5 million in an off-market transaction.
The portfolio included 463,427 square feet of retail space and 3.5 acres of excess land for future pad development. The empty big box properties are located throughout 20 cities and four states in the United States, with most of the sites in Northern and Southern California.
As part of the bulk sale was the Big Lots store and Roger at Oracle strip center at 3959-3979 N Oracle Road in Tucson that sold for $2,392,200 ($80 PSF) according to public records. The 29,720 square-foot building was built in 1988 and sits on a 2.27-acre prime retail lot at Oracle and Roger Road. It has been closed since building the new Big Lots store was built at 4525 N Oracle Road.
"Red Mountain is a huge fan of Tucson," Carol Harder, Director of Leasing with Red Mountain Group in Phoenix. " This is Red Mountain Group's fourth property in metro Tucson and have already started to do maintenance of property for leasing."
Lucky Wishbone was the sole tenant in the property at time of sale.
Aaron LaPrise and Dave Hammack with Cushman & Wakefield |PICOR will be handling the leasing assignment for Red Mountain.
Big Lots is shutting down some stores as the retailer moves toward small towns and away from urban areas.
The discount chain's latest closures include stores in urban and suburban parts of California and Colorado. The stores are the latest that Big Lots has shuttered: While it opened 50 new stores in 2022, the number of closings was "similar or slightly higher," CFO Jonathan Ramsden said during an earnings call in December.
Some of those closures are happening because Big Lots plans to sell the store sites, Ramsden said. In other cases, the company is closing locations that it says are "underperforming."
Going into 2023, Big Lots is trying to increase the number of stores it has in more sparsely-populated areas of the US. In small towns, Ramsden said that Big Lots faces fewer competitors and can operate stores for less money, leading to more profit than its locations in or near major metro areas.
"Our real estate strategy is going to be increasingly oriented towards these rural small town stores where the economics are significantly stronger than in the urban stores," he said.
The changes to Big Lots' store network come as the company faces declining sales. Historically high inflation has hit low-income consumers, Big Lots' primary customer base, particularly hard, CEO Bruce Thorn said in December. That's led many of them to hold off on buying the non-essential items that Big Lots sells, he added.
For more information on leasing 3959-3979 N Oracle, contact LaPrise and Hammack at 520.748.7100.