All Rag Shops Leases Are On the Block

"We purchased the designation rights because most of the leases throughout the portfolio have below market rents," says Michael Jerbich, senior managing director of the Melville, NY-based DJM Realty, who's heading the disposition. "They are located in centers that traditionally have been very difficult to get into and are very desirable to retailers.

"We plan to conduct an auction to sell each lease individually in late July," Jerbich says. "Given the value in the leases and the amount of interest we've already received, interested parties should act immediately."

More than half of the leases on the block are in the Garden State. They range in size from 7,000-sf units in Hamilton Square and Succasunna, to stores in the neighborhood of 18,000 sf in Cinnaminson, Hawthorne, Ocean and Wayne. In terms of current base rents, they range from sub-$10 rents in Hamilton Square, Hawthorne, Lakewood, Toms River and Totowa, to $16 to $18-plus rents in Brick, Edgewater, East Rutherford, Linden, Secaucus, Succasunna and Wayne.

Founded in 1963, Rag Shops was acquired by the Florida-based Sun Capital Partners in 2004 for $11.5 million. Earlier this year, the US Bankruptcy Court approved Rag Shops' petition to shut down.