Bed Bath & Beyond Inc. (NASDAQ:BBBY) shares surged almost 5% after the company announced a sale-leaseback agreement with Oak Street Real Estate Capital. The retailer will net around $250 million in proceeds from the transaction.

Bed Bath & Beyond sells 2.1 million square feet of space

The company said the property represents around 2.1 million sq. feet of space that include offices, retail stores, as well as a distribution facility. Bed Bath & Beyond will lease-back the space with Oak Street Real Estate Capital affiliate. The properties are in various states such as California, Texas, New Jersey, and New Hampshire, among others. Bed Bath &Beyond has an estimated 1,500 locations.

Mark Tritton, the new CEO of the struggling retailer, said that the transaction that involved the sale of its properties and leasing it back is a significant step in unlocking valuable capital. Tritton, who took the reins at the company in November, said that the amount they will get from the transaction would be put in enhancing the retailer’s plans.

The company indicated that it has been working with outside financial consultants in reviewing its real estate properties as well as determine the best uses. This is in a bid to optimize the company’s asset base and thus enhance stockholder value. Bed Bath & Beyond has indicated that proceeds from the transaction will go into reducing outstanding debt, funding share repurchases, and transforming core business.

Bed Bath & Beyond restructuring its leadership as part of the turnaround

The retailer has struggled in recent times against growing competition from online, big-box, and discount retailers. It’s new CEO, who joined from Target Corporation (NYSE: TGT), ousted six senior executives last month as part of management restructuring as he tries to turn things around.

Several companies have successfully pursued the selling and leasing back of real estate strategy. For instance, Macy’s Inc. (NYSE: M) and Sears Holdings Corp (OTCMKTS: SHLDQ) have successfully deployed the strategy in the past. However, this means the companies now be stuck with paying rent.