JEMB Realty is snapping up troubled (and bankrupt) discount retailer Daffy’s leasehold interests, “certain” real estate fixtures and “certain” intellectual property for $43 million, the company announced this afternoon.
As was previously reported yesterday by The Real Estate Weekly (and by The Commercial Observer), Aurora Capital Associates was rumored to have purchased the retail chain. A spokesman for JEMB Realty said Aurora has no interest in Daffy’s.
Daffy’s filed for Chapter 11 bankruptcy protection in Southern District of New York court Wednesday. The New Jersey-based retailer had liabilities of up to $70.5 million and owed money to over 5,000 creditors, Crain’s New York reports.
Those creditors include Nautica (owed $58,000 from Daffy’s) and Steve Madden Ltd. (owed $72,000). Annalee & Hope and Romeo & Juliet, both fashion brands, are owed over $77,000 apiece.
JEMB Realty Corp. CEO Morris Bailey said in a statement today that it would work to “provide payment in full to all of Daffy’s creditors.”
“JEMB Realty looks forward to the expeditious conclusion of the chapter 11 case,” he added.
In buying Daffy’s, JEMB has access to prime retail real estate locations, including a Times Square storefront and 125 East 57th Street. JEMB has owned the Herald Center, where Daffy’s has a three-story storefront, since the 1980s. CBRE’s Susan Kurland is currently marketing the space for a new retail tenant.
“We just started,” Ms. Kurland told The Commercial Observer. “That corner is one of the most highly trafficked corners in all of Manhattan and we already have tremendous interest in that location,” Ms. Kurland added.
JEMB now also owns three out-of-state leaseholds previously held by Daffy’s: 346 Route 10 in East Hanover New Jersey, Daffy’s Way in Secaucus New Jersey, and 1700 Chestnut Street & 17th Street in Philadelphia, PA.
In a statement, Daffy’s said it was proud of the company’s “pioneering role in helping to create the off-price retailing segment a half-century ago.”
“We regret that economic and industry conditions left us with no other viable alternative,” the company added.