Coles wins $2 billion bid for property: Reuters

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Coles has received a bid for a property he owns that could reach $2 billion, according to a Reuters report citing unnamed sources.

Coles and bidder, private equity firm Oak Street Real Estate Capital, recently met to discuss a deal in which Coles would sell the property for $1.5 billion to $2 billion and lease back the store, according to Reuters. did.

Kohl’s and Oak Street did not immediately respond to Retail Dive’s requests for comment.

A Reuters report said there was no certainty about the deal or the continuation of negotiations.

The reported talks come after acquisition talks with Franchise Group, which owns retailers such as Vitamin Shops and American Freight, ended without an agreement earlier this summer.

“We are currently evaluating other opportunities to unlock shareholder value, including reassessing monetization opportunities for a portion of our real estate portfolio,” Coles said at the time.

Leaseback transactions have the dual effect of adding lease liabilities to a company’s balance sheet while removing assets that add value and enhance credit ratings, helping to keep borrowing costs low. .

In a March filing, Coles himself described the sale-leaseback of the property as “an inefficient financing that adversely affects margins by permanently adding unnecessary rents and jeopardizes Cole’s investment grade rating.” called the source.

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