Divaris Disposes of 23 Closed Supermarkets
in Seven States

VIRGINIA BEACH, VIRGINIA – Thirty-six retail stores.  1,417,572 square feet, in total. 

            Bi-Lo and Bruno’s surplus disposition assignment is a huge undertaking.  The supermarket chains with the catch phrase “To Buy Low, Try Bi-Lo,” placed some of their closed Bi-Lo and Bruno’s portfolio in the hands of Divaris Real Estate Inc. (DRE) to sell or lease.

With extensive experience in the disposition of surplus sites, DRE, along with Hilco Real Estate and Realty Resources, were hired for the disposal of 36 Bi-Lo and Bruno’s supermarkets in May of 2005. The assignment was divvied up among the three real estate companies.  Hilco is spearheading the lease termination initiatives, DRE is handling the subleasing of 23 properties located in the Carolinas, Georgia, Alabama and Tennessee and Realty Resources has responsibility for subleasing the remainder of the properties in Alabama, Mississippi and Florida. 

“Three of the sites are actually owned by Bi-Lo and Bruno’s.  Most of the sites are leased,” noted Sandy M. Cohen, Divaris’ chief operating officer and the DRE principal heading the project.  “We are working with Bi-Lo and Bruno’s to sublease the sites or to terminate the leases in order to reduce Bi-Lo and Bruno’s overall lease liability.”

Comprised of over 1.3 million square feet, the properties include both freestanding and in-line stores.  Needless to say, the scope of the assignment is ambitious. 

            “It’s particularly challenging because they are such large blocks of space in a lot of small markets, across the Southeast,” explained Cohen.

“The first choice is to find a sub-tenant that can use the entire space.  If not, certainly no more than two or three users can be accommodated because it becomes very difficult to subdivide a large block of space like that into a number of small spaces.  So it’s a question of finding the best fit for each particular location.”

According to Cohen, upon being awarded the assignment, the immediate focus was to pursue the client’s main objective of disposing of the sites quickly, with the least cost.

“If we can terminate the leases without having to sublease them, that's better for Bi-Lo and Bruno’s.  That’s our goal,” he adds.  “For the most part, we have terminated the leases.”

To date, nearly 40 percent of the leases have been disposed.  Cohen expects even more movement by summer 2006.  It’ll be a testing task.  And, as always, DRE is up for the challenge.

Hope Mills, North Carolina is the site of one of the many Bi-Lo/Bruno's surplus properties under disposition by Divaris Real Estate.

With a number of offices along the East Coast, Divaris has been instrumental in the disposition of surplus properties for several national retailers, most recently including Hechinger’s/HQ, Hannaford Bros., Heafner Tire Group, Rite Aid, Colonial Foods/Pizza Hut, Best Buy, Food Lion and Wal-Mart.

DRE completed the disposition of 17 Hechinger’s/HQ eastern sites.  Both freestanding and in-line stores, the properties consisted of over 1.5 million square feet of indoor and garden center space in diverse markets.

Likewise, Hannaford Bros. sought the services of DRE’s Charlotte office.  The grocery store chain used Divaris’ expertise to dispose of 16 sites in the Carolinas and four in Virginia, in order to comply with a Federal Trade Commission ruling after the company's buy-out by Delhaize Group. 

In the case of The Heafner Tire Group, the decision to dispose of some of its excess property was solely based on its pace of expansion and the need for more attention to its distribution network.  So the independent marketer of tires and tire-related products called on DRE to divest of 11 buildings, totaling 260,000 square feet.

Divaris Real Estate also completed assignments for the disposition of ten surplus Rite Aids in Virginia and ten Pizza Hut properties throughout Hampton Roads, including one on Independence Boulevard in Virginia Beach’s central business district.  Wal-Mart had a surplus store in Chesapeake.   Divaris subdivided and leased the space to Best Buy, Old Navy and Ross.  This enabled Wal-Mart to sell the redeveloped store as an investment property.

            Whether the consequence of excess property, retail or e-commerce competition or the influx of town center and street retail development, many big boxes are forced to close their doors.  Fortunately, Divaris Real Estate is there to help open new ones.

Divaris Real Estate, Inc.
One Columbus Center, Suite 700
Virginia Beach, VA 23462
TEL: 757.497.2113 FAX: 757.497.1338
info@divaris.com