Big Lots VP talks leasing back Apple Valley distribution center

Published on

Big Lots VP talks leasing back Apple Valley distribution center

APPLE VALLEY – During a second quarter earnings call, Big Lots Executive Vice President Jonathan Ramsden discussed potentially selling and leasing back the distribution center in Apple Valley. The move will provide an equity gain for the company after reporting a second-quarter sales decline of 7.6%.

The Apple Valley distribution center of one of five centers located across the country. 

“…we have the synthetic lease on our Apple Valley distribution center in California, which — it needs to be refinanced by 2024 in any case,” said Ramsden. “We have — the equity attached to that belongs to us. So if we were to sell and lease it back, I mean, there’s the potential equity gain there for us.”

 





 

At a basic level, a synthetic lease is an operating lease. Normally this means that the bank (the lessor) retains formal ownership of the asset and rents it out to the business, in this case Big Lots, for the duration of the lease. One of the primary attractions of the operating lease is that the asset never appears on the lessee’s balance sheet and can be written off as an expense.

The lease back will allow Big Lots to sell the center to the bank, receive the equity that has accumulated and continue to operate out of the center under a rental agreement.

In addition, to the Apple Valley distribution center lease back, Ramsden discussed other leaseback options.

“…we have another 25 or 26 owned stores that we’re considering sale leaseback proposals for. We’ve also got our corporate headquarters here. So we have the ability to execute sale leasebacks on those, which we’re considering proposals currently have not made a final decision on, but that’s something that we are actively considering.”

Ramsden says there are also 25 underperforming stores that Big Lots is planning to sell outright without a leaseback. The company feels customers dealing with inflation, are pulling back on discretionary purchases.

For more information about the Big Lots second earnings visit https://www.benzinga.com/news/earnings/22/08/28684005/big-lots-reports-q2-earnings-above-street-estimate

spot_img

Latest articles

Report says California median home price sets new all-time high at $904,210

CALIFORNIA – The California Association of Realtors (CAR) published a report, May 17, showing...

Victorville makes CA’s top 10 cities with the largest numeric change in population 

SAN BERNARDINO COUNTY – The California Department of Finance published, last month, a report...

Department of Finance says California gained 67,000 people in 2023

CALIFORNIA – The California Department of Finance released a demographic report, April 30, with...

Victorville hosting street vendor educational program May 16

VICTORVILLE – Victorville is hosting, May 16, a free, educational workshop led by San...
Powered by Foreclosure.com

More like this

Report says California median home price sets new all-time high at $904,210

CALIFORNIA – The California Association of Realtors (CAR) published a report, May 17, showing...

Red Lobster kitchen equipment and furniture auction ends May 16

CALIFORNIA – Red Lobster announced Monday that it would be closing more than 50...

Report says CA housing affordability improved – $208,400 income needed for median home price

CALIFORNIA – California Association of Realtors' (CAR) quarterly Housing Affordability Index report, published May...