Commercial Real Estate, Capital, Insurance, Leasing & Management

Fate of Sports Authority’s South Florida stores in balance during bankruptcy filing

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"With the addition of Dick's Sporting Goods to the market, the consolidation of Sports Authority in South Florida was inevitable," said Cammi Goldberg, director of leasing and landlord representation at Fort Lauderdale-based Franklin Street.

Sports Authority warned that it could close 140 of its 463 stores nationwide after it filed Chapter 11 bankruptcy reorganization on Wednesday, and that could impact its 23 locations in South Florida.

According to coverage by sister paper Denver Business Journal, the Colorado-based retailer plans to close or sell 140 stores, and it could potentially sell a larger block of stores to rivals Dick’s Sporting Goods and Modell’s Sporting Goods. Its stores currently remain open.

See the list of South Florida locations for Sports Authority at the bottom of this story.

Sports Authority has a strong presence in South Florida, after all, it was founded here.

The original Sports Authority opened in 1987 with its first store in the Lakes Mall in Lauderdale Lakes. It was owned by Kmart at one time and then spun off. It merged with Colorado-based Gart Sports in 2003.

Paco Diaz, senior VP of retail properties for CBRE in South Florida, said most local Sports Authority stores range from 40,000 to 45,000 square feet and they’re generally in good locations.

“Overall it’s a positive for the market,” Diaz said of possible Sports Authority closures. “We are hungry for boxes [of space]. There aren’t too many boxes available. This will create an opportunity.”

According to CBRE, the retail vacancy rates in the fourth quarter in Miami Dade, Broward and Palm Beach counties were 3.4 percent, 6.4 percent and 6.5 percent, respectively. Diaz said South Florida is a healthy market for more national retailers so he expects less of a possibility that Sports Authority chooses to close stores here.

The Chapter 11 filing gives Sports Authority the power to exit leases or negotiate with landlords to rewrite leases with more favorable rates, said Joe Luzinski, senior managing director for the Miami office of DSI, which helps companies in bankruptcy and liquidation. Generally, retailers look to close stores that either have low sales or high expenses, including rent, he said.

“If it’s an under-valued lease, you might keep it even if revenue is not up to par,” Luzinski said. “But if it’s over-market lease and you have 30 years left on the lease, bankruptcy court allows you to get out of that lease and close that store.”

If Sports Authority chooses to sell locations, Luzinski said it’s more likely it would sell in concentrated geographic markets because it’s easier to have stores in the same area and provide them a support system.

“With the addition of Dick’s Sporting Goods to the market, the consolidation of Sports Authority in South Florida was inevitable,” said Cammi Goldberg, director of leasing and landlord representation at Fort Lauderdale-based Franklin Street. “This could result in opportunities for retailers catering to the same kind of educated consumer who frequents Sports Authority. Those consumers are seeking fitness, the outdoors and improved eating habits.”

The Sports Authority locations in South Florida are at:

Aventura: 18499 Biscayne Blvd.
Boca Raton: 20851 State Road 7
Boynton Beach: 363 N. Congress Ave.
Coral Springs: 9188 Wiles Road
Dadeland Station: 8364 S. Dixie Highway
Deerfield Beach: 3810 W. Hillsboro Blvd.
Delray Beach: 510 Linton Blvd.
Doral: 10688 N.W. 12th Street
Fort Lauderdale: 1901 N. Federal Highway
Hialeah: 3895 W. 20th Ave.
Hollywood: 4100 Oakwood Blvd.
Homestead: 2611 N.E. 10th Court
Jupiter: 1560 W. Indiantown Road
Kendall: 11910 S.W. 88th Street
Mid-Town Miami: 3401 N. Miami Ave.
Palm Beach Gardens: 3350 Northlake Blvd.
Pembroke Pines: 11140 Pines Blvd.
Pompano Beach: 2421 N. Federal Highway
Sunrise/Sawgrass Mills: 12801 W. Sunrise Blvd.
Sweetwater/Dolphin Mall: 11521 N.W. 12th Street
Wellington: 820 S. State Road 7
Westchester: 8571 Coral Way
West Palm Beach: 1875 Palm Beach Lakes Blvd.

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