{"id":1004118616,"date":"2015-05-04T07:09:18","date_gmt":"2015-05-04T15:09:18","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004118616"},"modified":"2022-12-08T02:22:28","modified_gmt":"2022-12-08T10:22:28","slug":"sears-macerich-make-headlines","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/sears-macerich-make-headlines\/","title":{"rendered":"Sears, Macerich Make Headlines"},"content":{"rendered":"

By Keith Loria, Contributing Editor\u00a0<\/em><\/p>\n

\"Jeff<\/a>

Jeff Green, Jeff Green Partners<\/p><\/div>\n

Sears Holdings Corp. has entered into a joint venture with The\u00a0Macerich Co.\u00a0as part of\u00a0Sears Holdings\u2019\u00a0continued efforts to enhance its financial flexibility and generate value from its real estate portfolio.<\/p>\n

This is the third joint venture Sears has made this month; after partnerships with General Growth<\/a> and Simon Property Group, generating $858 million for the cash-strapped Sears overall. Macerich\u00a0contributed\u00a0$150 million\u00a0in cash.<\/p>\n

\u201cWhat Sears is doing is unlocking some of the value of their real estate in an effort to continue to operate as a retailer,\u201d Jeff Green, president of Jeff Green Partners, told Commercial Property Executive<\/i>. \u201cThis is a little confusing to me.\u00a0 Is there a plan at Sears to continue to operate as a viable retailer?\u00a0If so, what is the strategy?\u00a0What is going to be Sears defining-difference from other retailers?\u00a0 To date it certainly hasn\u2019t been its soft-lines.\u00a0The only brand differentiation that Sears has done well with is in appliances (Kenmore) and tools.\u00a0That is such a small portion of the total store\u2019s square footage.\u201d<\/p>\n

Sears Holdings\u00a0contributed nine properties where\u00a0Sears\u00a0currently operates stores located at\u00a0Macerich\u00a0malls to the JV, including property with space leased to third parties.\u00a0Sears Holdings\u00a0will lease back from the JV and continue to operate existing\u00a0Sears Holdings\u00a0stores at the properties contributed to the JV.<\/p>\n

\u201cFor Sears, the transaction will have minimal day-to-day impact on customer-facing store operations or the overall shopping experience,\u201d Michael Lagazo, senior advisor, Retail, with commercial real estate advisor Sperry Van Ness, told CPE<\/i>. \u201cThe joint venture transactions make capital available for Sears to deploy or invest in other areas of the retail business.\u201d<\/p>\n

According to Lagazo, the lease agreements between the joint venture enable it the ability to optimize the value of recaptured space partly by subleasing to third parties. As an example, Corner Bakery now occupies the northwest corner of the Sears at Westfield UTC in San Diego. Sears has been in discussion with Williams-Sonoma as well as a potential sublessee.<\/p>\n

\u201cSimilar partnerships allow mall operators to redevelop the anchor spaces, enhance the merchant mix, as well as re-position\u00a0and optimize the asset by capturing higher rental income ultimately maximizing shopper traffic,\u201d he said. \u201cThese types of transactions\u00a0substantiate the value of department stores and anchor spaces.\u201d<\/p>\n

The nine properties being contributed to the JV are located at centers with average in-line sales of\u00a0$680\u00a0per square foot and include some of our top centers including\u00a0Washington Square, Los Cerritos Center, Arrowhead Towne Center,\u00a0Vintage Faire Mall, Danbury Fair Mall, Chandler Fashion Center,\u00a0Freehold Raceway,\u00a0Deptford Mall\u00a0and\u00a0South Plains Mall.<\/p>\n

\u201cSince the filing of the registration statement for\u00a0Seritage Growth Properties\u00a0a few weeks ago, we have entered into JV agreements with the leading mall operators in the U.S., demonstrating the value of\u00a0Sears Holdings\u2019 real estate portfolio,\u201d Edward Lampert, Sears Holdings\u2019 chairman & CEO, said in a company statement. \u201cWe are pleased to be in a position to unlock substantial value for\u00a0Sears Holdings\u00a0shareholders and further facilitate the company’s transformation.\u201d<\/p>\n

As for what this means to the industry overall, real estate attorney David Stone Phelps, who is in the Los Angeles office of Akin Gump, said REITS are having a more difficult time deploying capital at least as it relates to new construction and development and they are trying to find new areas for decent returns for investors.<\/p>\n

\u201cGrowth will come in the form of acquisition and not new development due to an oversupply of retail space, especially in primary markets,\u201d he told CPE<\/i>. \u201cIn short, at least in first-tier markets, growth in the short run will come from acquisition of malls or the REITS or other companies who own them. \u00a0The only out-of-ground construction is likely to come from construction in second- and third-tier markets or from acquisition and value added renovation in first-tier markets.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Sears Holdings Corp. has made a third joint venture this month and analysts are abuzz.<\/p>\n","protected":false},"author":451,"featured_media":1004081467,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21783,21742],"tags":[],"class_list":["post-1004118616","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investment","category-latest"],"acf":[],"yoast_head":"\nSears, Macerich Make Headlines - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/sears-macerich-make-headlines\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Sears, Macerich Make Headlines\" \/>\n<meta property=\"og:description\" content=\"Sears Holdings Corp. has made a third joint venture this month and analysts are abuzz.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/sears-macerich-make-headlines\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2015-05-04T15:09:18+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-08T10:22:28+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2013\/08\/Jeff-Green-color-2.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"375\" \/>\n\t<meta property=\"og:image:height\" content=\"336\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Keith Loria\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/sears-macerich-make-headlines\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/sears-macerich-make-headlines\/\",\"name\":\"Sears, Macerich Make Headlines - 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