Updated: Gelson’s Seals a Deal for Laguna Haggen

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The scarce inventory on the last day of operations by Haggen in South Laguna.
The scarce inventory on the last day of operations by Haggen in South Laguna.

 

 

 

 

 

 

 

 

 

 

 

 

 

High-end supermarket chain Gelson’s Markets won bankruptcy court approval to buy two more former Haggen properties, those in Laguna Beach and Carlsbad, Gelson’s President and Chief Executive Rob McDougall said in a statement this week.

“We have many shoppers coming to our Dana Point store from Laguna Beach, Laguna Niguel, and Aliso Viejo; we’re thrilled to be able to open a store closer to these shoppers,” McDougall said of the planned rebranding of the Laguna Beach location.

The Laguna Beach store is expected to reopen by April, spokesman Bron Heussenstamm said. Terms of the deal were not announced.

Gelson’s plans to relaunch its purchased stores early next year under its own brand with initial improvements to product selection and merchandising, followed several months later by redesign and construction, its statement says.

Since its acquisition in 2014 by TPG, Gelson’s has embarked on an ambitious expansion, buying eight former Haggen stores and opening new stores in Rancho Mission Viejo and Manhattan Beach. TPG, a private investment group in Fort Worth, Tex., has almost $74.3 billion in assets under management and its portfolio includes Burger King and Del Monte Foods, and retailers Petco and Neiman Marcus Group.

Gelson’s, based in Encino, operates 18 upscale supermarkets in the region and competes with upscale chains such as Bristol Farms and Whole Foods.

The landlord, Spirit Realty LLC, temporarily stalled Gelson’s bid for the Carlsbad and Laguna Beach stores apparently due to contesting lease terms. The Scottsdale-based real estate investment trust, which acquired 20 Haggen stores last December for $224 million, agreed to restructure the master lease, says a fact sheet posted Monday, Nov. 30. The court approved the deal on Nov. 25, which will allow Spirit to market the unsold stores itself.

“Haggen managed to find a buyer for 14 of the locations covered by the Spirit lease, but not the other six,” said Larry Tucker, of Newport Beach, who developed and owns the stores surrounding the Carlsbad Haggen.

“My guess is both sides came to the conclusion that it was in their interests to make the best deal they could and move on.  And in bankruptcy, where the court has wide latitude, it is better to decide what deal to make than to have the court decide for you,” Tucker said.

In its statement, Spirit says 14 of the 20 former Haggen stores leased to Gelson’s, Smart & Final, Albertson’s and Haggen will generate $1.1 million of the $1.4 million of the monthly rental revenue from the original master lease.

The unsold Haggen stores are located in Silverdale and Monroe, Wash., Eugene, Ore., Bakersfield, Las Vegas and Scottsdale, Ariz.

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