Saks Shows the Perils of Old Co-Tenancy Models in Retail Real Estate

• Co-tenancy blues: Saks’ bankruptcy shows how yesterday’s luxury mall anchors have quietly become today’s biggest risk.

• FTC kicks off: Oral arguments are underway in the FTC’s antitrust challenge to Zillow and Redfin.

• Raising Bain: Bain Capital Real Estate closed reached $5 billion in total capital raised, leaning into thematic, active ownership strategies.

Editor’s Pick

Saks Shows the Perils of Old Co-Tenancy Models in Retail Real Estate

When Saks Global filed for Chapter 11 early in 2026, it wasn’t just another storied name slipping into restructuring. It was the latest demonstration of how fragile the old department-store model has become, and how co-tenancy arrangements that once bolstered malls and luxury corridors can turn into liabilities in a crisis. The company behind Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman entered bankruptcy protection with more than 3.4 billion dollars in funded debt and about 8.4 million square feet of U.S. real estate holdings and ground leases on its books, supported by roughly $1.75 billion in debtor-in-possession financing just to keep operations running while it restructures.

Two years ago, Hudson's Bay Co., the parent of Saks, acquired Neiman Marcus Group in a $2.7 billion deal, merging three luxury department store brands into a single platform. This consolidation helped create overlapping store footprints and co-anchor configurations in many of the country’s most prized malls. The strategy failed to trigger material sales synergies and strained liquidity, weakened vendor confidence, and left inventory gaps that compounded traffic declines. In some luxury centers, Saks and Neiman sat shoulder to shoulder in the same tenant lineup, diluting the uniqueness each brand once brought to a property, and more importantly, cannibalizing each other's sales.

Part of the irony in the co-tenancy squeeze is that department stores once anchored stability for entire shopping districts. Today, those anchors are being reimagined as spaces for other uses: big-box off-price concepts, lifestyle grocers, fitness clubs, mixed-use residential conversions, even office or educational tenants where zoning allows. At Newport Centre in New Jersey, planned replacements for vacated anchor slots include large Primark stores and Dick’s House of Sport formats, splitting the footprint of one traditional department store into multiple experiential retail destinations. In many suburban malls, former anchor spaces are now turning into entertainment venues, health-care clinics, logistics hubs, or adaptive-reuse mixed-use parcels with housing above retail.

What happened at Saks Global suggests that going forward, landlords and developers will think even harder about tenant mix and its reliance on traditional retailers. One or two big anchors supporting a constellation of smaller tenants no longer assures the kind of traffic that justifies the largest footprints. Instead, owners increasingly view anchor tenants less as guarantees and more as risk factors if those tenants falter. The rising creative reuse of spaces once occupied by Macy’s, Lord & Taylor, Sears, and now Saks itself shows that tenant mix is becoming less about similarity and more about complementary use and resilience.

For some properties, this evolution will unlock opportunity: vacant anchor slabs can be reimagined into multiple revenue streams, aligning with shifting consumer behavior and broadening the appeal of retail destinations. But it also means reassessing how much weight landlords place on any one tenant’s performance. In the post-pandemic era of retail restructuring, the lessons of Saks are likely to echo beyond luxury corridors into shopping centers of all stripes.

Overheard

Bain Capital Raises $5B, Sharpens Focus on Under‑Served Property Sectors

Bain Capital just reported more than $5 billion in new capital across its real estate strategies, anchored by the $3.4 billion final close of Real Estate Fund III. That tally includes a $1.6 billion raise alongside 11North Partners for an open‑air retail platform and other co‑investments, marking a material step up from the roughly $3 billion Bain’s real estate group raised for its prior flagship vehicle.

The firm’s pitch this cycle leans on thematic research and active ownership in sectors they believe are underserved or poised for secular demand. Urban infill industrial, medical outpatient facilities, for‑rent townhomes, senior housing, marinas and storage assets all show up in Fund III’s target list, alongside necessity‑based retail anchored by strong tenants. Fundraising materials emphasize sourcing off‑market deals, partnering with specialized operators, and bolstering in‑house capabilities like debt capital markets to underpin that approach.

Putting that $5 billion into perspective, Bain’s real estate raise stands above many traditional value‑add funds but remains behind the largest global pools. Firms like Lone Star have historically closed real estate pools north of $5 billion and into the $7–8 billion range, driven by broader opportunistic mandates. This raise, while substantial, is part of a larger ecosystem of capital where scale can vary dramatically by strategy.

Oral Arguments Begin in FTC Lawsuit Against Zillow and Redfin

The Federal Trade Commission is in court today arguing its antitrust case against Zillow and Redfin, alleging that both companies engaged in anticompetitive conduct by leveraging control over real estate listing data and agent leads to limit competition and steer business toward their own services. The core of the FTC’s argument centers on whether Zillow and Redfin used their market positions in online listings and platform traffic to disadvantage competitors and tilt consumers toward affiliated services such as mortgage referrals, agent lead services, or premium advertising products.

During today’s oral arguments, lawyers from the FTC will emphasize the scale and reach of Zillow’s and Redfin’s platforms as near-ubiquitous gateways for home search, arguing that this dominance gives the companies leverage to influence where buyers and sellers get information and how leads are routed. The FTC is questioning whether restrictive access to listing data or strategic bundling of services unfairly inhibits rival brokerages and tech platforms from competing on a level playing field. Expect the FTC to frame its case around consumer harm, higher costs, less choice, and weakened competition, rather than just corporate tactics.

In response, lawyers for Zillow and Redfin are framing their business models as innovations that expanded consumer choice and improved information access. Defense arguments will likely stress any pro-competitive effects their platforms have had, such as increased transparency in property information and greater visibility for agents rather than gatekeeping.

The broader implication of this week’s proceedings goes beyond Zillow and Redfin. If the court accepts the FTC’s framing of control over listings and referral engines as a competitive bottleneck, platforms may face new obligations around data access, transparency of lead economics, and restrictions on how ancillary services are bundled. That could boost smaller competitive platforms but also require Zillow and Redfin to retool monetization strategies. The outcome of today’s arguments will be a key signal on where competition law meets the evolving economics of real estate technology.

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Propmodo Daily is written and edited by Franco Faraudo with contributions from readers like you and the Propmodo team.

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